Saturday, December 10, 2011

Suing lawyers: Are multiple causes of action / theories of liability available? - The rule against fracturing of legal malpractice claims may not always be clear-cut when it comes to application

ATTORNEY MALPRACTICE The fracturing-of-claims issue
Whether an attorney can be sued for something other than malpractice, i.e. professional negligence, is not a minor matter. Negligence and DTPA claims have a shorter limitations period than other theories of recovery, such as breach of contract, common-law fraud, and breach of fiduciary duty. A claim may thus be time-barred (or not) depending on its nature (or how the former clients' allegations against their former counsel are construed by the judge that presides over the malpractice lawsuit).

 Legal malpractice is not the only cause of action under which a client can recover from [their] attorney.”  Goffney v. Rabson, 56 S.W.3d 186, 190 (Tex. App.—Houston [14th Dist.] 2001, pet. denied) (citing Kahlig v. Boyd, 980 S.W.2d 685, 688 (Tex. App.—San Antonio 1998, pet. denied)).  “When the facts of a case support claims against a lawyer for something other than professional negligence,” the claims may be allowed.  Murphy v. Gruber, 241 S.W.3d 689, 695 (Tex. App.––Dallas 2007, pet. denied) (citing Latham v. Castillo, 972 S.W.2d 66, 68, 71 (Tex. 1998) (allowing pursuit of Deceptive Trade Practices Act (DTPA) cause of action for attorney’s allegedly unconscionable action in representing he was actively prosecuting client medical malpractice claim when he was not)).  But see Brescia v. Slack & Davis, L.L.P., No. 03-08-00042-CV, 2010 WL 4670322, at *7 (Tex. App.—Austin Nov. 19, 2010, pet. denied) (mem. op.) (attorneys may not be sued under DTPA unless misrepresentation cannot be characterized as advice, judgment, or opinion) (citing Tex. Bus. & Com. Code Ann. § 17.49(c)(1) (West Supp. 2011)). 
 “Texas law, however, does not permit a plaintiff to divide or fracture her legal malpractice claims into additional causes of action.”  Goffney, 56 S.W.3d at 190 (citing Greathouse v. McConnell, 982 S.W.2d 165, 172 (Tex. App.—Houston [1st Dist.] 1998, pet. denied); Kahlig v. Boyd, 980 S.W.2d 685, 688–91 (Tex. App.—San Antonio 1998, pet. denied); Smith v. Heard, 980 S.W.2d 693, 697 (Tex. App.—San Antonio 1998, pet. denied); Rodriguez v. Klein, 960 S.W.2d 179, 184 (Tex. App.—Corpus Christi 1997, no pet.); Am. Med. Elecs., Inc. v. Korn, 819 S.W.2d 573, 576 (Tex. App.—Dallas 1991, writ denied); Judwin Props., Inc. v. Griggs & Harrison, 911 S.W.2d 498, 506 (Tex. App.—Houston [1st Dist.] 1995, no writ); Bray v. Jordan, 796 S.W.2d 296, 298 (Tex. App.—El Paso 1990, no writ)). 
Therefore, in general, courts do not allow a case arising out of an attorney’s alleged bad legal advice or improper representation to be split out into separate claims for negligence, breach of contract, or fraud, because the “real issue remains one of whether the professional exercised that degree of care, skill, and diligence that professionals of ordinary skill and knowledge commonly possess and exercise.”  Kimleco Petroleum, Inc. v. Morrison & Shelton, 91 S.W.3d 921, 924 (Tex. App.––Fort Worth 2003, pet. denied) (citing Averitt v. PriceWaterhouseCoopers L.L.P., 89 S.W.3d 330, 333 (Tex. App.—Fort Worth 2002, no pet.); Sledge v. Alsup, 759 S.W.2d 1, 2 (Tex. App.—El Paso 1988, no writ) (“Nothing is to be gained by fracturing a cause of action arising out of bad legal advice or improper representation into claims for negligence, breach of contract, fraud or some other name.  If a lawyer’s error or mistake is actionable, it should give rise to a cause of action for legal malpractice with one set of issues which inquire if the conduct or omission occurred, if that conduct or omission was malpractice and if so, subsequent issues on causation and damages.”)). 
[Defendant-attorney ] Schleier and the firm contend that the [former clients'] claims are malpractice claims that are barred by a two-year statute of limitations.  See Tex. Civ. Prac. & Rem. Code Ann. § 16.003(a) (West Supp. 2011).  “When the basis for summary judgment is the statute of limitations, the movant has the burden to show from the record that the suit is barred by limitations.  Kimleco, 91 S.W.3d at 923 (Tex. App.—Fort Worth 2003, pet. denied) (citing Delgado v. Burns, 656 S.W.2d 428, 429 (Tex. 1983); Wright v. Fowler, 991 S.W.2d 343, 349 (Tex. App.—Fort Worth 1999, no pet.)). 
“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.”  Duerr v. Brown, 262 S.W.3d 63, 70 (Tex. App.—Houston [14th Dist.] 2008, no pet.) (quoting Murphy, 241 S.W.3d at 692). 
SOURCE: TEXARKANA COURT OF APPEALS - 06-11-00050-CV – 12/7/11 (affirming the trial court’s summary judgment because the statute of limitations barred the former clients’ claims, and no tolling provisions applies).

We address each cause of action in the CLIENTS/PLAINTIFFS’ complaint.  The CLIENTS/PLAINTIFFS sued [Attorney] Schleier and the firm for breach of contract, negligence, breach of fiduciary duty, and constructive fraud.  The breach of contract action was based upon an alleged failure to follow the CLIENTS/PLAINTIFFS’ instructions to draft the documents in the same manner as in the Hall transaction.  Claims of negligence arose from not following such instructions by placing the on-demand clause[7] in the note, undertaking dual representation without disclosure of the nature of the representation, and in failing to timely inform the CLIENTS/PLAINTIFFS of the dual representation.  The same actions gave rise to the breach of fiduciary duty and constructive fraud causes of action.[8] 
 “[T]he plaintiff must do more than merely reassert the same claim for legal malpractice under an alternative label.  The plaintiff must present a claim that goes beyond what traditionally has been characterized as legal malpractice.”  Duerr, 262 S.W.3d at 70.

RELATED LEGAL TERMS: law and lawerys, attorney malpractice, legal malpractic, characterization of claims, professional misconduct negligence incompetence

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