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Gonyea v. Scott

Court of Appeals of Texas, First District

November 2, 2017


         On Appeal from the 152nd District Court Harris County, Texas Trial Court Case No. 2014-51066

          Panel consists of Justices Jennings, Bland, and Brown.


          Harvey Brown Justice

         This case tests the bounds of the rule established in Peeler v. Hughes & Luce, 909 S.W.2d 494 (Tex. 1995) (plurality opinion), which limits the ability of plaintiffs who have been convicted of criminal offenses to obtain legal malpractice damages against their criminal-defense attorneys based on claims of poor performance of legal representation.

         Orion Scott-who had been convicted of several criminal offenses-hired attorney William Gonyea to file an application for writ of habeas corpus on his behalf. Under the terms of the contract for legal representation, Scott paid Gonyea a $25, 000 fee and then, due to confusion over bank authorizations, paid him $15, 000 more in overpayments.[1] Scott instructed Gonyea to return the $15, 000 overpayment; he did not.

         When three years had passed and Gonyea had neither filed the writ nor returned the overpayment, Scott sued him, asserting two causes of action. His first cause of action was for breach of contract. He sought $25, 000 in restitution damages, which was the full amount of the fee paid under the terms of the contract. His second cause of action was for theft and sought $15, 000 in damages, which was the amount of overpayment that Gonyea never returned.

         After answering the lawsuit, Gonyea moved for summary judgment, arguing that both of Scott's claims fail as a matter of law. The trial court ruled against him and, after a bench trial, entered judgment in Scott's favor on both claims for the damages sought, plus reasonable and necessary attorney's fees. Gonyea appeals, asserting that both claims fail as a matter of law.

         We affirm the judgment as to the breach-of-contract claim, holding that the public policies underlying the Peeler doctrine do not support extending the doctrine to restitution of monies paid for post-conviction legal services that were never performed. We reverse and render judgment in Gonyea's favor on the theft claim, holding that the claim accrued more than two years before it was asserted and that Scott failed to meet his burden to prove that the discovery rule applied.


         In January 2010, Orion Scott hired a criminal-defense attorney, William Gonyea, Jr., to conduct a legal investigation and file a petition for writ of habeas corpus on Scott's behalf to challenge six convictions that the Texas Court of Criminal Appeals had affirmed three years earlier. Gonyea and Scott entered into a written contract for legal representation, and Scott paid Gonyea $25, 000 in legal fees for the work detailed in the contract. Gonyea deposited the $25, 000 into his operating account.

         Due to confusion over whether the bank would authorize a payment from an inmate, Scott's sister-who held Scott's power of attorney-caused a second payment of $25, 000 to be paid to Gonyea for the habeas representation. Gonyea wrote to Scott in March 2010 informing him that he had received two $25, 000 payments and stating, "I will wait for you to advise me on what to do with the [second] $25, 000 check."

         Later that month, Gonyea agreed to assist Scott on another legal matter. He wrote to Scott that he agreed to "conduct an investigation to determine the status of [Scott's] parole and assist [Scott] in obtaining parole" and that his fee for the additional representation would be $10, 000. In the same letter, Gonyea stated that he still had Scott's sister's check for $25, 000 (the overpayment for the habeas representation) and offered to deposit the check into his "client trust account" and then return the remaining $15, 000 to Scott, either by sending Scott a check or depositing the money directly into Scott's bank account.

         After several communications, in late-August 2010, Scott instructed Gonyea to "deduct" the $10, 000 parole-work fee from the overpayment and deposit the remainder into Scott's bank account. Scott provided Gonyea with his bank information, including his account number.

         Nevertheless, within days of receiving Scott's letter, Gonyea deposited the full $25, 000 he received from Scott's sister into his operating account-not his trust account.[2] He did not deposit any money into Scott's account or send him a refund check for the overpayment.

         Three years later, Gonyea still had not prepared the habeas writ or returned the $15, 000 overpayment.[3] Scott replaced Gonyea with new counsel and filed suit against him, asserting claims for breach of contract to recover the $25, 000 fee payment and for theft to recover the $15, 000 overpayment.

         Gonyea moved for summary judgment on both of Scott's claims, arguing that the Peeler doctrine prohibited Scott's breach-of-contract claim and that the theft statute of limitations barred Scott's theft claim. See Peeler, 909 S.W.2d 494; see also Tex. Civ. Prac. & Rem. Code § 134.001-.005 (theft statute); id. § 16.003(a) (two-year statute of limitations for theft claims). The trial court denied the motion, and both claims proceeded to bench trial.

         During opening statement, Gonyea again urged that the Peeler doctrine applied to Scott's breach-of-contract claim, which he described as Scott "essentially" contending that he was "not happy with the way the lawyer performed under the contract." According to Gonyea, Scott was "claiming that he was dissatisfied with the time that it took and the manner in which [Gonyea] conducted the Habeas investigation and the time that it took for [Gonyea] to file a Habeas Petition." And, further, that Scott simply was "dissatisfied with the amount of correspondence that he received during the course of the representation."

         During his opening statement, Scott disputed Gonyea's characterization of his claim. His complaint was not that Gonyea performed poorly, but that he failed to perform at all. The contract specifically stated that Gonyea would conduct an investigation, file an application for writ of habeas corpus, and represent Scott in court. Scott argued that Gonyea did none of these things.

         Gonyea testified that he was Scott's counsel for three years before being replaced with new counsel. He agreed that Scott retained him to investigate an application for a habeas writ and then prepare and file the application. Gonyea testified that he met with Scott once, read the legal opinion affirming Scott's conviction, and performed initial legal research. When questioned about his legal research, Gonyea conceded he had no contemporaneous time records showing that he researched the case. But he did reference legal-research memoranda that were in his client file when he forwarded it to Scott's new counsel. When questioned about those memos, Gonyea testified that he could not specifically recall much about them.

         On further cross-examination, Gonyea admitted that, during the three years he represented Scott, he never interviewed Scott's trial counsel, never interviewed Scott's appellate counsel, never attempted to contact the police officers who investigated or testified about the underlying offenses, never interviewed any witness who testified at the criminal prosecution, never prepared any drafts of an application for habeas relief, and never even identified what issues should be pursued. He also never filed an application for the habeas writ, never requested an evidentiary hearing, and never represented Scott in court. Gonyea also acknowledged that he had promised to send Scott a comprehensive status update over a year after he was hired, but he never did that either.

         After the one-day trial, Scott moved to reopen the evidence. The trial court granted the motion and received additional evidence regarding the legal-research memoranda discussed previously. The four research memos were admitted into evidence. All of the memos had headers stating that they were prepared by a law clerk for Gonyea for the Scott file. One of the law-clerk authors testified that he did not prepare any legal-research memos for Gonyea or for the Scott file. He recognized the memos in evidence and testified that he had prepared them for another law firm.

         Gonyea testified that, for a time, he had shared office space with the other law firm. He conceded that the four legal memoranda were addressed to him and referenced the Scott client file only because he had accessed the other law firm's computer server, replaced the other law firm attorney's name and client name in the header of the memos with his name and Scott's client name, printed the memos, and added them to the Scott client file before forwarding that file to Scott's new attorney.[4] Gonyea denied that he did this to create the appearance that legal work had been performed on Scott's behalf during his representation when it had not.

         The lawyer with whom Gonyea shared office space also testified. He testified that he did not give Gonyea permission to use the memos as his own. Nor did he give Gonyea permission to present his firm's legal work as Gonyea's own:

I did not give you permission to go into my server and pull documents off of other cases, whether to use for your own purposes or to pad a file to make it look like you did work you didn't do to justify a fee you didn't earn. I didn't give you that permission, you didn't ask. And if you had access to those documents and took them without my permission, shame on you.

         The trial court entered findings of fact and conclusions of law, including that Scott paid Gonyea $25, 000 in legal fees under a contract for legal representation; Scott hired Gonyea to investigate and file a writ of habeas corpus on Scott's behalf; Gonyea "did not conduct the investigation, " "did not file a writ of habeas corpus, " and "did not perform the services promised in the written contract"; Scott's family inadvertently paid Gonyea $25, 000 more for that same work; Scott and Gonyea agreed that $10, 000 of the $25, 000 double-payment would be applied toward additional representation; and Gonyea did not return the remaining $15, 000 of the overpayment. The trial court found that Gonyea breached the contract for legal representation and violated the Texas Theft Liability Act, and the court awarded Scott the full $25, 000 fee for legal representation, $15, 000 in theft damages, and $76, 800 in reasonable and necessary attorney's fees.

         Gonyea appealed.

         Standards of Review

         Gonyea sought summary judgment on his affirmative defenses of the Peeler doctrine and statute of limitations. The applicability of the Peeler doctrine to negate causation presents a question of law that we review de novo. See In re Humphreys, 880 S.W.2d 402, 404 (Tex. 1994) (stating that "questions of law are always subject to de novo review").

         A defendant moving for summary judgment on the affirmative defense of limitations has the burden to conclusively establish that defense. KPMG Peat Marwick v. Harrison Cty. Housing Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). The defendant must conclusively prove when the cause of action accrued and negate the discovery rule, if it applies and has been pleaded or otherwise raised, by proving as a matter of law that there is no genuine issue of material fact ...

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