Legal Malpractice Law Review : Professional Responsibility Case Summaries & Commentary : Bennett J. Wasserman : LegalMalpractice.com : Lawyer Malpractice & Legal Ethics

Aduddell v. Parkhill, 821 S.W.2d 158 (Tex. 1991)

TX: Underlying asbestosis personal injury clam; statute of limitations

Student Contributor: Jean Moss Sullivan*

Facts: Plaintiff was diagnosed on April 24, 1983 with asbetosis and retained the defendant lawyers to sue asbestos manufacturers for plaintiff’s injuries. The plaintiff’s statute of limitations for the asbestos injuries expired on April 24, 1985. Lawyers did not file the suit until May 20, 1985. The federal district court entered judgment for the asbestos manufacturers because the plaintiff’s claim was filed after the 2-year statute of limitations.
Plaintiff sued Lawyers for breaches of express and implied warranties under the Deceptive Trade Practices Act and for negligence. Lawyers moved for summary judgment because the plaintiff’s suit was filed after the two-year statute of limitations for his legal malpractice claim. The plaintiff then pled the discovery rule but the trial court granted Lawyers’ motion to strike the amended petition as untimely. The trial court granted summary judgment in favor of Lawyers. The court of appeals affirmed the summary judgment, holding that when the plaintiff fails to timely plead the discovery rule, the legal injury rule applies in determining when a negligence cause of action accrues and when the statute of limitations begins to run. The plaintiff’s legal injury by the defendants occurred on April 24, 1985, the date the statute of limitations ran in the underlying case.

Issue: Whether the plaintiff’s claims against the defendants begin to toll before all of the appeals for the underlying claim are exhausted.

Ruling: When an attorney allegedly commits litigation malpractice, the court held that the statute of limitations does not begin tolling until all appeals of the underlying claim are exhausted.

Lesson: A plaintiff may wait to file suit for a legal malpractice claim until all appeals for the underlying claim have been exhausted. A plaintiff is able to consider the final outcome of the underlying claim before filing suit for legal practice. If the discovery rule applies, it is necessary to plead it in a timely fashion. Malpractice litigators should be aware of the burdens in asserting limitations defenses and relying on discovery and other tolling rules.

 
Jean Moss Sullivan is a third year student at Texas Tech University Law School and is a J.D. Candidate for May 2010. She received her B.A. in Religion from Southwestern University in 2007.

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 Douglas v. Delp, 987 S.W.2d 879 (Tex. 1999)

TX: Underlying commercial transaction; litigation; bankruptcy

Student Contributor: Chelsea Tucker* 

Facts:  Billy Delp, his wife Gertrude Delp, and John Harvison were business partners who had formed various companies. Billy believed Harvison was attempting to buy businesses outside of the companies’ core business activities. Billy and Gertrude removed Harvison as an officer of two of the companies, Nu-Way and Economy Oil. Harvison filed suit against Billy and Gertrude. Billy and Gertrude were represented by Douglas and Douglas, Kressler & Wuester, P.C. (collectively DKW). Two days into a temporary injunction hearing in which Gertrude was the primary witness, the two sides began settlement negotiations. After a short meeting with DKW, Billy and Gertrude signed a compromise settlement agreement (finalized by Harvison’s attorneys) in which Gertrude was required to resign from the boards of Nu-Way and Economy Oil. The Delps soon lost all assets held through Nu-Way. Billy and Gertrude Delp brought a legal malpractice suit against DKW over its handling of the settlement agreement and for failing to adequately prepare Gertrude for her testimony in the temporary injunction hearing. Soon after, Billy filed for bankruptcy. Billy listed the malpractice claims against DKW as an asset. The bankruptcy trustee sold the claims to Philip Treacy & Associates, which was acting on behalf of DKW’s malpractice carrier. Treacy filed a trial court motion to dismiss Billy’s malpractice claims. This motion was granted.   Following trial on Gertrude’s claims, the trial court granted a directed verdict for DKW. Gertrude and Billy appealed the directed verdict and the dismissal of Billy’s claims. The court of appeals reversed and remanded both Gertrude’s and Billy’s interest in the malpractice claims and part of Gertrude’s DTPA claims.

 Issues:

1) Whether Billy and/or Gertrude had standing to pursue their claims.
2) Whether a plaintiff may recover damages for mental anguish in a legal malpractice suit.
3) Whether DKW’s representation that the agreement would protect the Delps’ interests supports DTPA liability.

Ruling:

The Supreme Court held that:

1. Billy lacked standing to pursue claims in state court because the claims swept into his bankruptcy estate and Gertrude lacked standing because her claims for economic loss related to jointly managed business were part of her husband’s bankruptcy estate.

2. Mental anguish damages are not recoverable when the mental anguish is a consequence of economic losses caused by an attorney’s negligence; and (3) DKW’s representation that the agreement would protect the Delps’ interests was too vague to be actionable under DTPA.

Lesson:
1. A claim of mental anguish damages in a legal malpractice suit will generally not prevail.
2. Give your client enough information so that she is capable of making an informed decision before signing a settlement agreement.
3. Counsel clients on all legal aspects of documents they sign, especially those that may have a detrimental effect on the client.
4. Have the client sign a document saying that she has read and understands the agreement in its entirety, and acknowledges the possible negative results of signing the agreement.

*Chelsea Tucker is in her second year at Texas Tech School of Law and is a candidate for her Juris Doctor in May 2011. She is currently employed as a law clerk for a personal injury attorney and drafts petitions, motions, and appeals, consults with clients, and files documents at the courthouse. Chelsea has also interned with the District Attorney’s Office in Kerrville, Texas. During her first year at Texas Tech School of Law, Chelsea was awarded the Jurisprudence Award for Superior Academic Achievement in Legal Practice.

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 Aiken v. Hancock, 115 S.W.3d 26 (Tex. App.—San Antonio 2003, pet. denied).

TX: Underlying civil litigation "catastrophe".

Student Contributor: Courtney E. Hamilton*

Facts:   Douglas Aiken brought action against his former attorneys Patrick Hancock and Mark Ferguson, and their firm, Deadman and Ferguson, alleging violations of the Deceptive Trade Practices Act (DTPA), breach of fiduciary duty, negligence, gross negligence and breach of contract. The trial court partially granted Ferguson’s motion for summary judgment and dismissed Aiken’s breach of contract claims. The trial court also granted Ferguson’s first amended motion for summary judgment. Aiken appealed the decision of the trial court and neither the law firm of Deadman and Ferguson or Deadman were parties to the appeal. Aiken’s arguments to support his claim of breach of fiduciary duty were that Ferguson (1) falsely represented to Aiken his readiness to go forward and try Aiken’s case, and (2) failed to disclose that he was not ready to try Aiken’s case. Aiken also alleged that Ferguson falsely represented to him that the expert witness was ready to testify about a full audit and failed to disclose that the expert witness was not ready to testify about a full audit.
On appeal, Ferguson argued that Aiken’s claims are actually a single legal malpractice claim, and violating the Texas law that prohibits a plaintiff from fracturing legal malpractice claims.

Issue:  Whether Aiken improperly "fractured" his legal malpractice claims against Ferguson.

Ruling:  The San Antonio Court of Appeals held that Aiken improperly fractured his legal malpractice claim against Ferguson. The court found that Aiken’s classification of his claim as breach of fiduciary duty was improper because allegations did not consist of “self dealing, deception, or express misrepresentations in Ferguson’s legal misrepresentations in Ferguson’s legal representation.” The proper classification of these allegations would be a legal malpractice claim.
The court also held that Aiken’s assertion that Ferguson’s DTPA allegations based on alleged express misrepresentations did not state a cause of action independent from the malpractice claim.
After the court found that there was only one cause of action for legal malpractice the court applied the summary judgment standard of review. In doing so, the court held that summary judgment was proper because Aiken failed to prove causation and damages, two necessary elements for a legal malpractice claim.

Lesson:  A breach of fiduciary duty involves issues of loyalty, confidentiality, and candor while a legal malpractice claim involves negligence and the lawyer’s alleged failure to exercise ordinary care. A plaintiff cannot fracture their malpractice claim when they cannot meet the elements of the additional malpractice claims. The court will view this as one malpractice claim and the plaintiff must establish by a preponderance of the evidence all the elements of a malpractice claim (duty, breach, causation, and damages).
 

*Courtney E. Hamilton is a third year law student at Texas Tech School of Law, and a candidate for her J.D. in May 2010. She currently serves as Articles Editor for the Texas Tech Administrative Law Journal. She has served as a law clerk for the U.S. Attorneys’ Office for the Northern District of Texas, the Texas State Board of Pharmacy, and the Texas Commission on Environmental Quality. Courtney received her B.S. in Chemistry from Sam Houston State University.

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