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Young v. Day

Court of Appeals of Texas, First District

March 27, 2018


          On Appeal from County Court at Law No. 3 Galveston County, Texas Trial Court Case No. CV0072910

          Panel consists of Chief Justice Radack and Justices Brown and Lloyd.


          Russell Lloyd Justice

         Appellants, Donald and Doris Young, appeal the trial court's order granting summary judgment in favor of appellees, Dwayne R. Day, P.C., and Dwayne R. Day (collectively "Day"), on the Youngs' claims of professional negligence, breach of contract, negligent misrepresentation, fraud, breach of fiduciary duty, violations of the Deceptive Trade Practices Act ("DTPA"), and declaratory relief. In two issues, the Youngs contend that the trial court (1) erred in granting summary judgment in favor of Day and (2) abused its discretion in failing to rule on their discovery motions prior to granting summary judgment. We affirm in part and reverse and remand in part.


         In 2009, Day represented the Youngs in a personal injury lawsuit against Don Clapsaddle ("Clapsaddle lawsuit") stemming from injuries Donald sustained after he was struck by Clapsaddle's car while walking in a post office parking lot in August 2007. Lawrence Tylka, the Youngs' previous attorney, intervened in the Clapsaddle lawsuit seeking to recover unpaid fees and expenses, [2] and Chris Di Ferrante, a judgment creditor, filed a motion for turnover order in the suit, seeking to collect on two previously obtained judgments against the Youngs.

         The case proceeded to trial on September 7, 2010. The jury found Donald solely responsible for the accident, and the trial court rendered a take-nothing judgment against the Youngs on February 1, 2011. The Fourteenth Court of Appeals affirmed. See Young v. Clapsaddle, No. 14-11-00396-CV, 2012 WL 2160249 (Tex. App.-Houston [14th Dist.] June 14, 2012, no pet.) (mem. op.).

         On October 8, 2014, the Youngs filed suit against Day, asserting claims for legal malpractice and breach of contract arising from the Clapsaddle lawsuit. On March 6, 2015, Day filed an answer and special exceptions. On April 17, 2015, Day filed an amended answer and special exceptions to which he attached as an exhibit a document entitled "Power of Attorney and Contingent Fee Contract" purportedly entered into by the Youngs and Day.

         On May 21, 2015, the Youngs filed their first amended petition alleging that Day had (1) failed to call certain witnesses at trial; (2) allowed Clapsaddle to present his witnesses by deposition rather than in person; and (3) insisted that the Youngs settle the lawsuit for any amount. They also alleged that he entered into an oral agreement to represent Donald in a lawsuit against Clear Lake Rehabilitation Hospital ("CLRH") for an injury Donald allegedly sustained while being treated for his accident-related injuries. They assert that Day did not follow through on the alleged oral contract and caused them to miss the deadline to sue the hospital. They further alleged that Day falsely advised them that they had to go to trial because there was no settlement offer. In April 2015, Day produced two pdf files which appear to be a contingency fee contract executed by the parties and a refusal in writing of a $200, 000 settlement offer from Clapsaddle, both of which had apparently been signed by the Youngs. The Youngs allege that they never signed a contract with Day, and that Day never told them that he had received a $200, 000 settlement offer from Clapsaddle. Claiming that these are "fraudulently generated documents, " the Youngs added claims for negligent misrepresentation, fraud, breach of fiduciary duty, and declaratory judgment.

         On October 28, 2015, Day filed a traditional motion for summary judgment. In the motion, Day alleged that (1) the Young's non-negligence claims were barred by the rule against fracturing a professional negligence claim; (2) their negligence claims were barred by the applicable statute of limitations; (3) their claims for professional negligence, breach of fiduciary duty, and negligent misrepresentation claims failed because the Youngs did not designate an expert to testify with regard to the appropriate standard of care, breach, and causation; (4) the Youngs' claim against Day with regard to CLRH failed because Day never agreed to represent the Youngs against CLRH; and (5) their declaratory judgment action failed because they signed a contingency fee agreement.

         On November 13, 2015, the Youngs filed their summary judgment response, a supplemental amended original petition adding a claim for DTPA violations, and various other motions. Day filed a reply to the Youngs' summary judgment response.

         On January 5, 2016, the trial court held a summary judgment hearing. On February 1, 2016, the trial court signed an order granting Day's motion for summary judgment. On March 2, 2016, the Youngs filed a motion for new trial which the trial court denied on March 21, 2016. This appeal followed.

         Summary Judgment

         In their first issue, the Youngs contend that the trial court erred in granting summary judgment on their claims.

         A. Standard of Review

         We review a trial court's decision to grant a motion for summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). Under the traditional summary judgment standard, the movant has the burden to show that no genuine issues of material fact exist and that it is entitled to judgment as a matter of law. Tex.R.Civ.P. 166a(c); Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). A defendant moving for traditional summary judgment must either (1) disprove at least one element of the plaintiff's cause of action or (2) plead and conclusively establish each essential element of an affirmative defense to rebut the plaintiff's case. Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997). A matter is conclusively established if reasonable people could not differ as to the conclusion to be drawn from the evidence. See City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005). In our review, we take the non-movant's competent evidence as true, indulge every reasonable inference in favor of the non-movant, and resolve all doubts in favor of the non-movant. Diversicare Gen. Partner, Inc. v. Rubio, 185 S.W.3d 842, 846 (Tex. 2005).

         When, as here, a trial court's order granting summary judgment does not specify the ground relied upon, the court must affirm the summary judgment if any of the summary judgment grounds is meritorious. See FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000). Because the trial court in this case did not specify the ground upon which it relied for its ruling, we will affirm if any theory advanced by Day in his summary judgment motion is meritorious. See Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 157 (Tex. 2004).

         B. Analysis

         In support of their argument that the trial court erred in granting summary judgment, the Youngs contend that (1) their claims for breach of fiduciary duty, fraud, and DTPA violations are not barred by the anti-fracturing rule; (2) the discovery rule and the doctrine of fraudulent concealment applied to toll the statute of limitations on their claims; (3) Day did not seek dismissal of their DTPA claim and therefore summary judgment on this claim was improper; and (4) their claim related to Day's alleged failure to file suit against CLRH was improperly dismissed.

          1. Anti-Fracturing Rule

         The rule against fracturing claims prevents plaintiffs from converting what are actually professional negligence claims against an attorney into other claims such as fraud, breach of contract, breach of fiduciary duty, or DTPA violations. Won Pak v. Harris, 313 S.W.3d 454, 457 (Tex. App.-Dallas 2010, pet. denied). The rule prevents legal malpractice plaintiffs from "opportunistically transforming a claim that sounds only in negligence into other claims" to avail themselves of longer limitations periods, less onerous proof requirements, or other tactical advantages. Beck v. Law Offices of Edwin J. (Ted) Terry, Jr., P.C., 284 S.W.3d 416, 427 (Tex. App.-Austin 2009, no pet.).

         For the anti-fracturing rule to apply, however, the gravamen of a client's complaints must focus on the quality or adequacy of the attorney's representation. Murphy v. Gruber, 241 S.W.3d 689, 692-93 (Tex. App.-Dallas 2007, pet. denied). "If the gist of a client's complaint is that the attorney did not exercise that degree of care, skill, or diligence as attorneys of ordinary skill and knowledge commonly possess, then that complaint should be pursued as a negligence claim, rather than some other claim." Deutsch v. Hoover, Bax & Slovacek, L.L.P, 97 S.W.3d 179, 189 (Tex. App.-Houston [14th Dist.] 2002, no pet.). If, however, the client's complaint is more appropriately classified as another claim, for example, fraud, DTPA, breach of fiduciary duty, or breach of contract, then the client can assert a claim other than negligence. Id. In particular, claims of breach of fiduciary duty against an attorney focus on whether the attorney obtained an improper benefit from representing the client. Won Pak, 313 S.W.3d at 457. Merely characterizing conduct as a "misrepresentation" or "conflict of interest" does not necessarily transform what is really a professional negligence claim into a fraud or breach of fiduciary duty claim. Id.

         When determining whether an allegation states a claim for negligence or some other cause of action, the court is not bound by the parties' own characterization of the pleadings. Haase v. Abraham, Watkins, Nichols, Sorrels, Agosto & Friend, LLP., 404 S.W.3d 75, 82 (Tex. App.-Houston [14th Dist.] 2013, no pet.). Whether certain allegations asserted against an attorney and labeled as breach of fiduciary duty or fraud are actually claims for professional negligence is a question of law to be determined by the court. Murphy, 241 S.W.3d at 692.

         On appeal, the Youngs contend that that they have asserted proper breach of fiduciary duty, fraud, and DTPA claims that are distinct from their negligence claim. They argue that while it is true that they originally only pleaded claims for negligence and breach of contract, Day's production of the fraudulently generated fee contract and settlement memo "changed the 'gist' of the claims dramatically." They argue that upon production of those documents that they never signed, "[t]hey amended their pleadings to include fraud, breach of fiduciary duty, and DTPA violations, all based on the fraudulent, and extremely negligent act of failing to convey a critical settlement offer to plaintiffs on the eve of trial."

         2. Breach of Fiduciary Duty

         In their summary judgment response, the Youngs alleged that Day breached his fiduciary duty "by promising to sue [CLRH] with no intention of doing so and refusing to settle the Clapsaddle suit . . . because Day wanted Di Ferrante paid" and the Youngs would not agree to pay Di Ferrante out of their settlement funds. They further stated that "when Day is deposed, [the Youngs] intend to attempt to determine i[f] Day obtained a benefit from Di Ferrante as Day violated attorney-client privilege to disclose confidential communications between [the Youngs] and Day and confidential settlement offers from [Clapsaddle's attorney] to negotiate with Di Ferrante."

         These allegations do not give rise to a separate breach of fiduciary duty claim. The Youngs' mere assertion that they "intend to attempt to determine if Day obtained a benefit" does not raise a fact issue as to whether Day received an improper benefit, an element of the claim of breach of fiduciary duty. Id. at 693 (noting that claims of breach of fiduciary duty against attorney focus on whether attorney obtained improper benefit from representing client and involve integrity and fidelity of attorney); Beck, 284 S.W.3d at 429. Speculative and conclusory statements are insufficient to raise an issue to defeat summary judgment. See Brown v. Aztec Rig Equip., Inc., 921 S.W.2d 835, 846 (Tex. App.-Houston [14th Dist.] 1996, writ denied); Gibson v. Methodist, 822 S.W.2d 95, 100 (Tex. App.-Houston [1st Dist.] 1991, writ denied). Absent an allegation that Day actually received an improper benefit, the Youngs' assertions that Day promised to sue CLRH when he had no intention of doing so, refused to settle the Clapsaddle lawsuit, and disclosed confidential communications do not state a claim for breach of fiduciary duty. See Kemp v. Jensen, 329 S.W.3d 866, 872 (Tex. App.-Eastland 2010, pet. denied) (concluding that, absent allegation that attorney had received improper benefit, plaintiffs' contention that attorney had engaged in deceptive conduct by failing to disclose to plaintiffs that he had sued wrong entity stated claim for professional negligence rather than breach of fiduciary duty); West v. Hubble, No. 05-06-01683- CV, 2008 WL 2941854, at *2 (Tex. App.-Dallas Aug. 1, 2008, pet. denied) (mem. op.) (claims that attorney agreed with opposing counsel to modify settlement agreement without client's knowledge or consent after representation did not constitute breach of fiduciary duty but was legal malpractice claim); Judwin Props., Inc. v. Griggs & Harrison, 911 S.W.2d 498, 506 (Tex. App.-Houston [1st Dist.] 1995, no writ) (finding no evidence to indicate unfairness or deception in attorneys' use of confidential information to support claim for breach of fiduciary duty, but instead found allegation of improper disclosure of confidential information was merely claim for legal malpractice).

          3. Fraud

         The Youngs rely on the same alleged misconduct discussed above as the basis for their fraud claim. In their summary judgment response, they argued that a genuine issue of material fact existed as to whether Day promised to sue CLRH and either decided not to sue without informing the Youngs or never intended to bring suit. Allegations concerning an attorney's delay or failure to handle a matter entrusted to the attorney give rise to a claim for professional negligence. See Murphy, 241 S.W.3d at 698-99. Despite the Youngs' claim of Day's intentional misrepresentation, this is a claim for professional negligence. Samson v. Ghadially, No. 14-12-00522-CV, 2013 WL 4477863, at *4 (Tex. App.-Houston [14th Dist.] Aug. 20, 2013, no pet.) (mem. op.) (concluding plaintiff's claims that attorney told him that he would prosecute medical malpractice claim, and later avoided contact with plaintiff, did not file lawsuit, and dismissed plaintiff as client shortly before expiration of limitations period stated claim for professional negligence); Meullion v. Gladden, No. 14-10-01143-CV, 2011 WL 5926676, at *4 ...

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