File: 051013F - From documents
transmitted: 12/13/2007
AFFIRMED;
Opinion Filed December 13, 2007.
In The
Court of Appeals
Fifth
District of Texas at Dallas
............................
No. 05-05-01013-CV
............................
KAREN
BROCK MURPHY, AMELIA BROCK BANNER, AND JODY BROCK IRWIN, INDIVIDUALLY
AND AS CO-INDEPENDENT EXECUTORS OF THE ESTATE
OF DORIS BERGLUND BROCK AND AS CO- TRUSTEES OF THE BROCK FAMILY TRUST,
Appellants
V.
G. MICHAEL GRUBER, WILLIAM D. ELLIOTT,
AND KANE, RUSSELL, COLEMAN & LOGAN, P.C., Appellees
.............................................................
On Appeal from the 298th Judicial District
Court
Dallas County,
Texas
Trial Court Cause No.
02-02546-M
.............................................................
OPINION
Before Justices
O'Neill, Lang-Miers, and Mazzant
Opinion By
Justice Lang-Miers
In this case, we decide
whether certain claims pleaded as breach-of-fiduciary-duty and fraud claims are really impermissibly
fractured professional negligence
See Footnote 1
claims barred by the two-year statute of limitations. Karen Brock Murphy, Amelia
Brock Banner, and Jody Brock Irwin, individually and as co-independent executors
of the estate of Doris Berglund Brock and as co- trustees of the Brock Family
Trust (the Brocks), appeal the trial court's summary judgment orders dismissing
their breach-of-fiduciary-duty and fraud claims against G. Michael Gruber,
William D. Elliott, and Kane, Russell, Coleman & Logan, P.C. (the Lawyers).
We affirm.
I. Factual and
Procedural Background
Charles D. Howell
was a limited partner in VSMI/Blockbuster Ltd. I, a limited partnership formed to own and operate Blockbuster franchises.
He sued various defendants for selling the general partnership interests and
assets back to the franchiser, Blockbuster Entertainment Corp., without
appropriately compensating the limited partners. The Lawyers represented Howell
in that lawsuit and obtained a $123 million judgment, consisting of $13 million
in actual damages and $110 million in punitive damages.
The Brocks
contend here that B. Coleman Renick, another limited partner in VSMI/Blockbuster Ltd. I, was the business partner and trusted
confidant of their father, Harry Joe Brock, who was also
a limited partner. See
Footnote 2
After Brock's death, his widow and their children (the Brocks) continued to look
to Renick for advice and counsel. Renick became interested in pursuing claims
similar to Howell's and encouraged the Brocks to join the lawsuit. Renick told
the Brocks that the Lawyers, specifically Gruber, expressed great confidence in
the value of their claims. Gruber also stated that most of the issues had been
decided in the Howell case and the next partnership group would have little to
do to prove damages. Because the Brocks trusted Renick, they agreed to join the
lawsuit. The Brocks looked to Renick to guide them through the lawsuit and
allowed him to act as their agent in dealing with the Lawyers. As the case
progressed, the Blockbuster defendants filed a counterclaim against Renick. The
Lawyers negotiated a $7.5 million settlement in the case, and the trial court
entered a final judgment on August 14, 1997 based on the parties' settlement
agreement. On July 9, 2001, the
Brocks sued Renick and the Lawyers for, among other
claims, breach of fiduciary duty. See Footnote 3
The Brocks claimed the Lawyers represented them with divided loyalties, failed
to inform them of material facts as soon as a conflict arose, and failed to make
a full and fair disclosure of every facet of a proposed settlement of the
Blockbuster case. They amended their petition on April 21, 2004, to add a
claim for fraud against the Lawyers. The Brocks sought fee forfeiture and
imposition of a constructive trust as damages.
The Lawyers moved for
summary judgment on the breach-of-fiduciary-duty claim, asserting the Brocks' claim constituted one claim for legal
malpractice and the statute of limitations on that claim had expired. The trial
court agreed and granted the Lawyers' motion on that basis. The Lawyers
filed a second motion for summary judgment on the Brocks' fraud claim, arguing
that claim was also barred because it was an impermissible fracturing of the
legal malpractice claim, which the court had already concluded was time barred,
or, alternatively, because it was first asserted more than four years after the
final judgment in the underlying lawsuit. The trial court granted the second
motion for summary judgment without stating the basis for its ruling. This
appeal followed.
II. Issue
Presented
In a single
issue, the Brocks contend the trial court erred when it concluded their breach-of- fiduciary-duty and fraud claims are barred
by the two-year statute of limitations that applies to negligence claims.
III. Standard of
Review
The function
of summary judgment is not to deprive a litigant of its right to a full
hearing on the merits of any real issue of fact,
but to eliminate patently unmeritorious claims and untenable defenses. Turner
v. Church of Jesus Christ of Latter-Day Saints, 18 S.W.3d 877, 885 (Tex.
App.-Dallas 2000, pet. denied) (citing Gulbenkian v. Penn, 252 S.W.2d
929, 931 (Tex. 1952)). Here, the Brocks only challenge whether the trial court
properly characterized the claims they labeled breach of
fiduciary duty and fraud as negligence claims. See Footnote 4
Whether allegations against a lawyer, labeled as breach of fiduciary duty,
fraud, or some other cause of action, are actually claims for professional
negligence or something else is a question of law to be determined by the court.
See, e.g., Greathouse v. McConnell, 982 S.W.2d 165, 172 (Tex.
App.-Houston [1st Dist.] 1998, pet. denied) (stating court had to decide precise
nature of claims alleged before considering grounds asserted in summary judgment
motion). Our review of a decision of a question of law is de novo. See Barber
v. Colo. Indep. Sch. Dist., 901 S.W.2d 447, 450 (Tex. 1995) (issues of law
decided de novo).
IV. Applicable
Law
A. The Difference Between
Negligence,
Breach-of-Fiduciary-Duty, and Fraud Claims Against Lawyers
Professional negligence,
or the failure to exercise ordinary care, includes giving a client bad legal advice or otherwise improperly
representing the client. Newton v. Meade, 143 S.W.3d 571, 574 (Tex.
App.-Dallas 2004, no pet.); Greathouse, 982 S.W.2d at 172. For example, a
lawyer can commit professional negligence by giving an erroneous legal opinion
or erroneous advice, by delaying or failing to handle a matter entrusted to the
lawyer's care, or by not using a lawyer's ordinary care in preparing, managing,
and prosecuting a case. See, e.g., Newton, 143 S.W.3d at 574;
Kimleco Petroleum, Inc. v. Morrison & Shelton, 91 S.W.3d 921, 923-24
(Tex. App.-Fort Worth 2002, pet. denied). The statute of limitations on
professional negligence claims against lawyers is two years. Parsons v.
Turley, 109 S.W.3d 804, 807 (Tex. App.-Dallas 2003, pet.
denied).
On the other hand, breach
of fiduciary duty by a lawyer “involves the 'integrity and fidelity' of an attorney and focuses on whether an attorney obtained
an improper benefit from representing the client.” Gibson v. Ellis, 126
S.W.3d 324, 330 (Tex. App.-Dallas 2004, no pet.) (citing Kimleco
Petroleum, 91 S.W.3d at 923). “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.” Id. (citing Goffney v. Rabson, 56 S.W.3d 186, 193 (Tex.
App.-Houston [14th Dist.] 2001, pet. denied)). The statute of limitations on a
claim for breach of fiduciary duty is four years. Willis v. Donnelly, 199
S.W.3d 262, 279 (Tex. 2006).
Texas courts have allowed
clients to assert fraud claims against lawyers when the specific allegations of fraud centered on the fees charged for the
lawyers' services. See Sullivan v. Bickel & Brewer, 943 S.W.2d 477,
481 (Tex. App.-Dallas 1995, writ denied) (citing T.O. Stanley Boot Co. v.
Bank of El Paso, 847 S.W.2d 218, 222 (Tex. 1992)). The statute of
limitations on fraud claims is four years. Id.; Tex. Civ. Prac. &
Rem. Code Ann. § 16.004 (Vernon 2005).
Texas courts do
not allow plaintiffs to convert what are really negligence claims into claims for fraud, breach of contract, breach of
fiduciary duty, or violation of the DTPA. See, e.g., Rangel v.
Lapin, 177 S.W.3d 17, 24 (Tex. App.-Houston [14th Dist.] 2005, pet. denied)
(concluding claims for DTPA violations and breach of contract actually claim for
legal malpractice because crux of claims was lawyers did not provide adequate
legal 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 not fully prepared to testify did not allege “self-dealing, deception,
or express misrepresentations in [the lawyer's] legal representation,” to
support separate cause of action for breach of fiduciary duty); Kimleco
Petroleum, 91 S.W.3d at 924 (crux of claim that lawyer negligently failed to
timely designate qualified expert witness and misled clients into believing case
ready for trial stated claim for legal malpractice, not breach of fiduciary
duty); Ersek v. Davis & Davis, P.C., 69 S.W.3d 268, 270, 274 (Tex.
App.-Austin 2002, pet. denied) (DTPA claim based on law firm's alleged
“misrepresentations regarding its competency” was impermissibly fractured claim
for legal malpractice); Goffney, 56 S.W.3d at 193-94 (client's
allegations of breach of fiduciary duty against lawyers were “no more than a
claim for legal malpractice” because allegations did not “amount to
self-dealing, deception, or misrepresentations”); Greathouse, 982 S.W.2d
at 172-75 (misrepresentations alleged as claims for breach of fiduciary duty,
fraud, breach of contract, and others, interpreted as claims for legal
malpractice because complaint was that lawyer did not provide adequate legal
representation); Klein v. Reynolds, Cunningham, Peterson & Cordell,
923 S.W.2d 45, 49 (Tex. App.-Houston [1st Dist.] 1995, no writ) (op. on mot. for
reh'g) (principal allegation that lawyer filed defective appeal without
obtaining extension alleged legal malpractice, not breach of contract, breach of
fiduciary duty, or violations of DTPA).
This Court has
differentiated between claims against a lawyer for professional negligence and breach of fiduciary duty. For example, in
Murphy v. Mullin, Hoard & Brown, L.L.P., 168 S.W.3d 288 (Tex.
App.-Dallas 2005, no pet.), the focus of the clients' allegations was negligent
drafting or review of documents and failure to timely inform the clients of
defects in the documents. Id. at 290 n.1. Additionally, the clients did
not complain that the lawyers received an improper benefit from the
representation. Id. As a result, we concluded the clients' claim for
breach of fiduciary duty was actually a claim for professional negligence.
Id.; see also Gibson, 126 S.W.3d at 330 (concluding that,
even if lawyer gave incorrect explanations for deductions from settlement in
personal injury lawsuit, no conclusive evidence lawyer knew of falsity at time
or that explanations made for purpose of subordinating client's interest);
Sprowl v. Dooley, No. 05-06-00359-CV, 2007 WL 1330447, at *1 (Tex.
App.-Dallas May 8, 2007, no pet.) (mem. op.) (client's allegations that attorney
failed to investigate and prosecute claim, failed to answer and respond to
discovery, failed to file stay, and failed to file motion for contempt are
allegations of professional negligence, even though client couched allegations
in terms of negligence, fraud, and DTPA); Beck v. Looper, Reed & McGraw,
P.C., No. 05-05-00724-CV, 2006 WL 1452108, at *1 (Tex. App.-Dallas May 26,
2006, no pet.) (mem. op.) (complaint that lawyer failed to disclose he omitted
performance criteria from employment agreement and that lawyer transferred
shares of stock without criteria having been met alleged inadequate legal
representation and did not allege claim for breach of fiduciary
duty).
We differentiated between
claims of professional negligence and breach of contract in Newton v. Meade. In that case, the client, Dallas
Meade, received a traffic ticket. Newton, 143 S.W.3d at 572. Meade called
Everett Newton's office and was told Newton could handle the matter and that
Meade would be notified when a court date was set. Id. Meade sent Newton
his citation and a check for the attorney's fee. Id. But Newton did not
file an appearance in the traffic citation matter, and Meade received a letter
from the city clerk informing him the city was processing a complaint for
failure to appear and issuing a warrant for his arrest. Id. After several
unsuccessful attempts to speak to Newton, Meade received a letter from Newton
declining to represent Meade and returning the fee. Id. at 573. Meade
sued Newton for violations of the DTPA, malpractice, and breach of contract.
Id. A jury found in favor of Meade on the malpractice and
breach-of-contract claims. On appeal, we determined that Meade's claim was
really a professional negligence claim, not a claim for breach of contract,
because Newton's conduct in failing to file an appearance raised the question
whether he failed to exercise that degree of care, skill, or diligence that is a
lawyer's professional duty. Id. at 575. As a result, we reversed the
damages award on the breach-of-contract claim. Id.
When the
facts of a case support claims against a lawyer for something other than professional negligence, clients have been allowed to
pursue those other claims. In Latham v. Castillo, 972 S.W.2d 66, 69-70
(Tex. 1998), the clients alleged not only that the lawyer failed to timely file
their claim, but also that the lawyer “affirmatively misrepresented to them that
he had filed and was actively prosecuting the claim.” The court concluded that
to characterize this claim as one for legal malpractice would ignore the
distinction between negligent and deceptive conduct. Id. at
69.
Additionally, in
Sullivan v. Bickel & Brewer, the client alleged his lawyers
“negligently represented him,” charged excessive
fees, billed him for work that was never performed, “provided legal services in
a manner intended to fraudulently lengthen the duration and increase the scope
of litigation to increase their billings . . . [and] deceived him regarding
their representation and billing practices for that representation.”
Sullivan, 943 S.W.2d at 482-83. We concluded the client stated causes of
action for negligent legal practice and fraud because the case involved both
“the quality of [the lawyers]' professional services” and also, “as a separate issue, the integrity of their billing
practices.” See
Footnote 5
B. Conflict-of-Interest
Claims Against Lawyers
Courts in this state have
reached different results in deciding whether a conflict-of-interest allegation against a lawyer gives rise to a claim
for professional negligence or some other cause of action. For example, in
Deutsch v. Hoover, Bax & Slovacek, L.L.P., 97 S.W.3d 179, 187, 190
(Tex. App.-Houston [14th Dist.] 2002, no pet.), the Houston Fourteenth Court of
Appeals concluded the following allegations of undisclosed conflicts of interest
stated an independent claim for breach of fiduciary duty:
failing to counsel and
advise Deutsch about the conflicts which arose during the Law Firm's
representation of Deutsch . . .;
failing to
withdraw from representation of Deutsch once the conflicts arose;
and
failing to advise Deutsch to retain
separate counsel, in light of the Law Firm's conflicts of interest in representing Deutsch.
See
also Spera v. Fleming, Hovenkamp & Grayson, P.C., 25 S.W.3d 863,
873 (Tex. App.-Houston [14th Dist.] 2000, no
pet.) (remanding claim for breach of fiduciary duty because court concluded fact
issue existed concerning whether lawyers had duty to tell clients about
potential conflict of interest in time for clients to obtain other counsel prior
to hearings).
Likewise, in Archer v.
Medical Protective Co., 197 S.W.3d 422, 427-28 (Tex. App.-Amarillo 2006, pet. denied), the Amarillo Court of Appeals
concluded that, although the allegations in the petition were “somewhat
spartan,” one of the client's allegations could be characterized as a claim for
breach of fiduciary duty, as opposed to a claim for professional
negligence:
failure to “represent [client/insured]'s interests notwithstanding the
interests of [insurer] in a situation in which
the representation of [client/insured] was adversely limited by [the lawyer's]
own interest in keeping the business and favor of
[insurer].”
The court held the allegation stated an independent claim for
breach of fiduciary duty because it “concerns a
matter of divided loyalties, e.g., the pursuit of [the attorney's] own
pecuniary interests over the interests of his client.”
Id.
In contrast, in Kahlig
v. Boyd, 980 S.W.2d 685, 689 (Tex. App.-San Antonio 1998, pet. denied), the client asserted claims for fraud and DTPA
violations, arguing his lawyer's affair with his current wife during a child
custody dispute with his ex-wife created a conflict of interest the lawyer was
required to disclose. The San Antonio Court of Appeals concluded some of the
client's fraud and DTPA claims alleged legal malpractice because the client was
really claiming that once the lawyer started the affair, the lawyer was not
representing the client to the best of the lawyer's abilities. Because the
client abandoned his legal malpractice claim before trial, the court concluded
the client had also abandoned these “disguised malpractice claims.” Id.
at 689. In summary, some
Texas courts have recognized that breach-of-fiduciary-duty claims alleging the
lawyer obtained an improper benefit from his representation or improperly failed
to disclose his own conflict of interest are not professional negligence claims.
But other courts have held the claim is a professional negligence claim if the
claim is really that the lawyer's conflict of interest prevented him from
adequately representing the client.
See Footnote 6
As is apparent from our review of cases, there is a lack of clarity in this area
of the law. Some of that may be attributable to the fact that the relationship
between the lawyer and the client is inherently a fiduciary relationship. In
non- lawyer cases in which there is a fiduciary relationship, many of the claims
against the fiduciary are labeled breach-of-fiduciary-duty claims. However, with
lawyers, the standard of care in negligence claims is often defined by the
characteristics of that inherent fiduciary relationship. As a result, courts
refer to the fiduciary relationship that the lawyer has to the client and use
fiduciary standards to define the standard of care required of lawyers. See,
e.g., Two Thirty Nine Joint Venture v. Joe, 60 S.W.3d 896, 905 (Tex.
App.-Dallas 2001), rev'd on other grounds, 145 S.W. 3d 150 (Tex. 2004).
And courts have most often applied those standards to conclude that the claims
are really negligence, not breach-of-fiduciary-duty claims.
V. Standard in This
Case
Based on this
review of case law, we analyze the claims in this case recognizing that claims regarding the quality of the lawyer's
representation of the client are professional negligence claims, but that not
all claims by clients against lawyers are professional negligence claims. And
although the Brocks have labeled their claims breach of fiduciary duty and
fraud, we are not bound by the labels the parties place on their claims. See,
e.g., State Bar of Tex. v. Heard, 603 S.W.2d 829, 833 (Tex. 1980);
BCY Water Supply Corp. v. Residential Invs., Inc., 170 S.W.3d 596, 604-05
(Tex. App.-Tyler 2005, pet. denied). Additionally, characterizing conduct as a
“misrepresentation” or “conflict of interest” does not alone transform what is
really a professional negligence claim into either a fraud or a
breach-of-fiduciary-duty claim. See, e.g., Aiken, 115 S.W.3d at
29; Kimleco Petroleum, 91 S.W.3d at 924; Ersek, 69 S.W.3d at 270,
274; Goffney, 56 S.W.3d at 193-94; Greathouse, 982 S.W.2d at
172-75; Klein, 923 S.W.2d at 49. Instead, to determine what statute of
limitations applies to the claims, we must discern the real substance of the
claims.
At oral argument, counsel
for the Brocks argued their claims allege a conflict of interest and that this Court, in Two Thirty Nine Joint Venture v.
Joe, held that a conflict of interest forms the basis of a claim for breach
of fiduciary duty. We disagree with the Brocks' characterization of the
Joe case. In Joe, we were not called upon to decide, and did not
discuss, whether claims had been impermissibly fractured. Instead, we concluded
“an attorney's duty of care includes disclosure of any conflict of interest that
may affect the attorney's representation of that client's
interest.” Joe, 60 S.W.3d at 900. See Footnote 7
The Brocks'
counsel also contended that in the Newton case, we endorsed the
Deutsch court's analysis and
concluded that conflict-of-interest allegations against lawyers constitute
breach- of-fiduciary-duty claims. Again, we disagree. The Newton court
referred to Deutsch, noting the Deutsch court's conclusion that
some claims had not been impermissibly fractured in that case. See
Newton, 143 S.W.3d at 574-75. But the Newton court concluded that the
allegations in the case it was deciding did not invoke an independent contract
claim because the client's claim that the lawyer failed to file an appearance
“raised the question whether he failed to exercise that degree of care, skill,
or diligence that is a lawyer's professional duty.” Id. at 575. In other
words, the claim was based on a tort standard of care.
Id.
Also at oral argument,
the Lawyers' counsel agreed that some of the Brocks' allegations assert a conflict of interest, but he argued those
allegations do not claim self-dealing or the type of intentional misconduct at
issue in Deutsch and Sullivan. He contended that
breach-of-fiduciary-duty claims include claims that a lawyer gained some
improper benefit because of the attorney-client relationship, or engaged in
stealing or fraudulent billing practices. He argued all of the claims in this
case are really negligence claims because they all essentially complain about
the nature of the legal advice that was given.
A. The Brocks'
Breach-of-Fiduciary-Duty Claims
We look at the language
in the first amended petition to determine whether the Brocks are really complaining about the quality of the services the
Lawyers performed or something else. We note that the remedies the Brocks
seek-fee forfeiture and a constructive trust-are remedies available for
breach-of-fiduciary-duty claims. However, the remedy sought is only one factor
we consider when determining the nature of the claims. See Klein, 923
S.W.2d at 49. In this case, it is not a dispositive factor. The Brocks
alleged the following specific breaches of the Lawyers' fiduciary
duties:
(1) the Lawyers “continu[ed] to represent Renick and the Brock[s] after
Renick was sued by way of counterclaim without
getting a written waiver of the conflict of interest” from the
Brocks;
(2) the Lawyers “represent[ed] to the Brock[s] that their
claims were not worth pursuing at trial should
Renick settle out despite the fact that [the Lawyers] knew that the [Brocks] had
viable and valuable claims independent of the claims or cooperation of
Renick”;
(3) the Lawyers “urg[ed] the
[Brocks] to accept the $7.5 million aggregate settlement offer (which [the Brocks] did, relying upon the [Lawyers']
expertise and duties of loyalty to them, and the purported truthfulness of the
[Lawyers'] representations)”;
(4) the Lawyers “engag[ed] in
self-dealing when they continued to represent both Renick and the Brock[s] after Renick was sued by way of a
counterclaim and no longer wanted to pursue the matter to
trial”;
(5) the Lawyers “agree[d] to set aside the findings of the court in the
Howell case, after advising [the Brocks] that
the Howell case had decided most of the issues leaving 'very little to do to
prove damages' and charging [the Brocks] exorbitant hourly fees for
reestablishing and proving the issues set aside”;
(6) the Lawyers “divid[ed] the
aggregate settlement, half to Renick and half to [the Brocks], despite the fact that Renick had been sued by way of
counterclaim and knowledge that Renick's cause of action was probably barred by
limitations while [the Brocks'] claims were not”;
(7) the Lawyers “chos[e] their own interest in obtaining a multimillion
dollar fee in the Howell case through taking
action in that case which was detrimental to the [Brocks']
interest”;
(8)
the Lawyers “fail[ed] to represent [the Brocks'] interest with undivided
loyalty;
(9) the Lawyers “fail[ed] to inform
clients of all material facts as soon as conflicts arose”;
(10) the Lawyers
“fail[ed] to make full and fair disclosures of every facet of the proposed
'Howell' settlement and the settlement of the
[Blockbuster] lawsuit”;
(11) the Lawyers “ha[d] the [Brocks] sign a settlement
document releasing another client in the same
suit (Renick) without advising them of the effect of such release and then
attempted to use such release in this suit to the detriment of [the Brocks] and
to their own benefit.”
We conclude
these allegations complain about the quality of the Lawyers' representation, specifically, the Lawyers' failure to
properly advise, inform, and communicate with the Brocks about the case, which
are claims of professional negligence. See Archer, 197 S.W.3d at 427
(claims that lawyer neglected matters, mis-evaluated case, and failed to
communicate with client alleged professional negligence); Deutsch, 97
S.W.3d at 187, 189-90 (allegation that law firm failed to counsel and advise
client about purpose and effect of indemnity language in engagement letter
stated claim for professional negligence, not breach of fiduciary duty);
Longoria v. Whitehurst, No. 12-03- 00298-CV, 2005 WL 465527, at *1 (Tex.
App.-Tyler 2005, pet. denied) (mem. op.) (lawyers' alleged failure to explain
present value of client's settlement stated claim for professional
negligence).
Although paragraph (4)
states the Lawyers “engaged in self-dealing when they continued to represent both Renick and the Brock[s],” the Brocks do not
allege the Lawyers deceived them, pursued their own pecuniary interests over the
Brocks' interests, or obtained any improper benefit by continuing to represent
both clients. Cf. Archer, 197 S.W.3d at 427-28 (allegation that lawyer
pursued his own pecuniary interest over interests of client alleged self-dealing
to support claim for breach of fiduciary duty). Additionally, paragraph (7),
which states the Lawyers “chos[e] their own interest in obtaining a multimillion
dollar fee in the Howell case,” to the detriment of the Brocks, relates to
paragraph (5) and does not, without more, allege the type of dishonesty or
intentional deception that will support a breach-of-fiduciary-duty claim.
See O'Donnell v. Smith, 234 S.W.3d 135, 146 (Tex. App.-San Antonio
2007, pet. filed) (concluding allegation that attorney failed to “exercise the
highest degree of care, good faith and honest dealing,” without more, not
sufficient to support a claim for breach of fiduciary duty).
In summary,
we conclude these allegations assert claims for professional negligence because the essence of the allegations is that the
Lawyers' representation fell below the quality required under the law. As a
result, we conclude the trial court did not err by concluding these claims are
claims for legal malpractice.
We overrule this sub-part
of appellants' sole issue.
B. The Brocks' Fraud
Claims
In a single paragraph in
their first amended petition under the subheading “FRAUD,” the Brocks alleged:
The actions of the Defendants
constituted fraud. False and misleading information was given to the Plaintiffs by Defendants Renick, Gruber, Elliott, and Kane
Russell. Information was withheld by those Defendants. The false information and
withheld information was material, was given or withheld with the intent that
the Plaintiffs rely on false or incomplete information, and Plaintiffs did so
rely to their damage.
In oral argument, counsel for the Brocks contended these
allegations stand on their own, are sufficient
to generally allege misrepresentation and fraud, and demonstrate the fraud claim
is not a fractured negligence claim. We disagree.
As we held in
Sullivan, claims against lawyers can be separately pursued as
fraud claims. However, in Sullivan, the
claims we concluded could be separately pleaded as fraud claims centered around
allegations that the lawyers “fraudulently lengthen[ed] the duration and
increase[d] the scope of litigation to increase their billings” and billed for
work that was never performed. Sullivan, 943 S.W.2d at 482-83. The Brocks
do not make claims such as those made in Sullivan. In fact, the Brocks do
not identify any allegations of conduct in the fraud claim we quoted from their
pleadings that we can review to determine whether a separate claim for fraud is
stated that may be subject to a different statute of
limitations.
Additionally, the Brocks
did not challenge the second ground upon which the trial court could have granted summary judgment-the Lawyers' argument
that the fraud claim was barred because it was filed more than four years
following the accrual of the cause of action. Where, as here, a trial court does
not specify the grounds upon which summary judgment is based, an appellant must
specifically challenge every possible ground for rendition of summary judgment.
See Malooly Bros., Inc. v. Napier, 461 S.W.2d 119, 121 (Tex. 1970);
Jones v. Hyman, 107 S.W.3d 830, 832 (Tex. App.-Dallas 2003, no pet.);
Cullen/Frost Bank v. Commonwealth Lloyd's Ins. Co., 852 S.W.2d 252, 256
(Tex. App.-Dallas 1993), writ denied per curiam, 889 S.W.2d 266 (Tex.
1994). If the appellant does not challenge one of the grounds for summary
judgment, the judgment may be affirmed on that ground alone. Jones, 107
S.W.3d at 832; Cullen/Frost Bank, 852 S.W.2d at 256.
We overrule
this sub-part of appellants' sole issue.
VI. Conclusion
We affirm the
trial court's judgment.
ELIZABETH
LANG-MIERS
JUSTICE
Footnote
1
Appellees use the term “malpractice” to refer to a claim for professional
negligence. See Black's Law Dictionary
978 (8th ed. 2004) (defining “malpractice” as “[a]n instance of negligence or
incompetence on the part of a professional”). We refer to the negligence claim
as professional negligence for purposes of clarity.
Footnote
2
We recite the facts in accordance with the standard requiring that, when
reviewing a summary judgment against a plaintiff
based on the pleadings, we view the facts in the pleadings in the light most
favorable to the plaintiff. Natividad v. Alexsis, Inc., 875 S.W.2d 695,
699 (Tex. 1994).
Footnote
3
The claims asserted against Renick are not an issue on appeal.
Footnote
4
As we have noted, the trial court did not state the basis for the summary
judgment on the Brocks' fraud claim. One basis
is that the trial court could have characterized the fraud claim as a claim for
negligence.
Footnote
5
In reaching our conclusion, we relied on two other cases in which appellate
courts held that a client properly stated a
cause of action for fraud against a lawyer: Estate of Degley v. Vega, 797
S.W.2d 299, 303 (Tex. App.-Corpus Christi 1990, no writ), in which the court
stated, “We see an important distinction between an action for negligent legal
practice, which is clearly governed by the two-year limitations period
applicable to personal injuries[ ], and for intentional fraud committed by an
attorney”; and Jampole v. Matthews, 857 S.W.2d 57, 62 (Tex. App.-Houston
[1st Dist.] 1993, writ denied), in which the court stated,“We distinguish, as
the Corpus Christi Court of Appeals did, between an action for negligent legal
practice and one for fraud allegedly committed by an attorney relating to the
establishing and charging of fees for services.” Sullivan, 943 S.W.2d at
483.
Footnote
6
Courts in other jurisdictions have distinguished between negligence and breach
of fiduciary duty by concluding that negligence
claims involve standards of care, whereas breach-of-fiduciary-duty claims
involve standards of conduct. See, e.g., Kilpatrick v. Wiley, Rein
& Fielding, 909 P.2d 1283, 1290 (Utah Ct. App. 1996). Some courts
include a duty to avoid conflicts of interest within the standard of conduct.
See, e.g., Tyson v. Moore, 613 So.2d 817, 823 (Miss. 1992). And
other courts include the duty of loyalty as part of the duty of competent
representation and consider these allegations as raising only professional
negligence claims. See, e.g., In re Cooperman, 633 N.E.2d 1069,
1071 (N.Y. 1994).
Footnote
7
The majority in Joe refers to the case as one for malpractice and
variously refers to breach of fiduciary duty and
negligence. As the dissent noted:
239 JV's amended petition includes a single cause of action under the
heading “Negligence/Gross Negligence and Breach
of Fiduciary Duty and of Loyalty.” The majority titles its analysis “Breach of
Fiduciary Duty” but addresses the claims throughout as malpractice, employing
the traditional elements of negligence. 239 JV conceded in its summary judgment
response that “regardless of characterization [of its negligence and breach of
fiduciary duty claims], the analysis would be the same under the particular
facts of this case.”
Joe, 60 S.W.3d at 920 n.8 (FitzGerald, J.,
dissenting).
File Date[12/13/2007]
File Name[051013F]
File
Locator[12/13/2007-051013F]