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Sheller v. Corral Tran Singh, LLP

Court of Appeals of Texas, Fourteenth District

May 17, 2018

DAVID SHELLER, Appellant
v.
CORRAL TRAN SINGH, LLP, SUSAN TRAN, and BRENDON SINGH, Appellees

          On Appeal from the 127th District Court Harris County, Texas Trial Court Cause No. 2016-01407.

          Panel consists of Justices Boyce, Jamison, and Brown.

          OPINION

          Marc W Brown Justice.

         Appellant David Sheller appeals from the trial court's granting summary judgment in favor of appellees Corral Tran Singh, LLP (CTS), Susan Tran, and Brendon Singh (collectively, CTS Defendants) on Sheller's claims for violations of the Texas Deceptive Trade Practices Act (DTPA) and negligent misrepresentation. Sheller also appeals from the trial court's denying summary judgment in Sheller's favor on his claims. Sheller further challenges the trial court's failure to require CTS Defendants to admit requests for admission or to strike CTS Defendants' pleadings under Texas Rule of Civil Procedure 215.4. Concluding that the trial court could properly grant summary judgment on CTS Defendants' attorney-immunity defense, and that the trial court did not abuse its discretion by refusing to impose sanctions on CTS Defendants, we affirm.

         I. Background

         New Millennium Management, L.L.C., operated a commercial building in Houston, Texas. In September 2013, New Millennium filed a voluntary petition under chapter 11 of the Bankruptcy Code. New Millennium as the debtor-in-possession was initially represented by Margaret McClure, as approved by the bankruptcy court in October 2013.

         On January 5, 2014, New Millennium-named as the client-signed a fee agreement with CTS. Sheller signed the fee agreement as the sole member of New Millennium. New Millennium filed an application to employ CTS as a substitute for McClure, which the bankruptcy court approved on January 13, 2014.

         At the time, New Millennium creditor TexHou Investment Group, Ltd., had on file a motion to appoint a chapter 11 trustee or to convert the case to a chapter 7 bankruptcy case. The hearing on the motion took place on January 22 and 30, 2014. CTS handled the hearing. On February 25, 2014, the bankruptcy court denied TexHou's motion to convert but agreed to appoint a trustee to oversee the estate of New Millennium. The trustee was appointed on February 28, 2014. This order ended the engagement of CTS for New Millennium, which was no longer a debtor-in-possession. Upon the motion of the chapter 11 trustee and TexHou, the case was converted to a chapter 7 case in June 2014.

         In May 2014, CTS filed an amended final application for approval of compensation for services rendered and reimbursement of expenses incurred as chapter 11 bankruptcy counsel for debtor New Millennium for the time period of January 5, 2014, to February 25, 2014. There was no objection to CTS's application. The bankruptcy court held a hearing and in August 2014 concluded that CTS should be allowed a fee of $3, 880.

         The bankruptcy case was dismissed in October 2015. In January 2016, Sheller filed suit against CTS Defendants for DTPA violations and "negligence and legal malpractice." Sheller amended his petition to remove the negligence and malpractice claims and to add claims for negligent misrepresentation.

         Sheller alleged that CTS Defendants: did not prepare witnesses and improperly conducted direct examinations; did not research and incorrectly advised Sheller there could be no appeal from the appointment of the chapter 11 trustee; did not timely put together an exclusive plan; did not list expert witnesses and exhibits; did not spend adequate time on monthly operating reports; and did not adequately and timely confer with Sheller or return phone calls.

         With regard to the DTPA, Sheller alleged that Tran violated section 17.50(2) by violating an express warranty and making a false statement, and that CTS Defendants violated "section 17.46 et seq." because their "services and ability were represented to be competent and they were of a different standard, quality or character." Sheller alleged that CTS Defendants' "repeated failures to list experts, exhibits, perform diligent research or even any research before making statements, and the refusal to put together an exclusive plan before the time expired to do so" violated section 17.50(3) of the DTPA. Sheller also pleaded "negligent misrepresentation as to all statements by [CTS Defendants] in representing New Millennium."

         In April 2016, CTS Defendants removed the case to the United States District Court for the Southern District of Texas. The case was remanded in July 2016.

         The parties filed cross-motions for summary judgment. CTS Defendants filed a motion for summary judgment based on the affirmative defenses of res judicata and attorney immunity.[1] Sheller filed a response[2] and a supplemental response.[3] Sheller filed a motion for summary judgment, arguing that there were no material issues of fact on his DTPA and negligent-misrepresentation claims.[4] CTS Defendants responded.[5]Sheller replied.[6]

         Sheller filed and amended a motion for sanctions and default judgment. Sheller then filed a "supplemental motion for sanctions and default judgment for aggravated perjury pursuant to Penal Code art. 37.02 et seq."[7] The trial court granted CTS Defendants' summary-judgment motion and denied Sheller's. Sheller filed a motion for new trial. The trial court denied his motion. Sheller timely appealed.

         II. Analysis

         A. Standard of review

         We review summary judgments de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). A plaintiff moving for traditional summary judgment must conclusively establish all essential elements of its claim. Cullins v. Foster, 171 S.W.3d 521, 530 (Tex. App.-Houston [14th Dist.] 2005, pet. denied) (citing MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex. 1986)); see Tex. R. Civ. P. 166a(c). Traditional summary judgment for a defendant is proper when it (1) negates at least one element of each of the plaintiff's claims or (2) establishes all elements of an affirmative defense to each claim. Am. Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997); Cullins, 171 S.W.3d at 530 (citing Sci. Spectrum, Inc. v Martinez, 941 S.W.2d 910, 911 (Tex. 1997)); see Tex. R. Civ. P. 166a(c).

         Once the moving party establishes its right to a traditional summary judgment, the burden shifts to the nonmoving party to present evidence raising a genuine issue of material fact, thereby precluding summary judgment. See M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000) (per curiam); see Navy v. Coll. of the Mainland, 407 S.W.3d 893, 898 (Tex. App.-Houston [14th Dist.] 2013, no pet.). When reviewing a traditional summary judgment, we take as true all evidence favorable to the nonmoving party and indulge every reasonable inference in the nonmoving party's favor. Cantey Hanger, LLP v. Byrd, 467 S.W.3d 477');">467 S.W.3d 477, 481 (Tex. 2015).

         "When, as in this case, the parties file competing motions for summary judgment, and the trial court grants one motion and denies the other, this court may consider the propriety of the denial as well as the grant." Lidawi v. Progressive Cty. Mut. Ins. Co., 112 S.W.3d 725, 729 (Tex. App.-Houston [14th Dist.] 2003, no pet.). If the issue raised is based on undisputed and unambiguous facts, then we may determine the question presented as a matter of law. Id. (citing Gramercy Ins. Co. v. MRD Invs., Inc., 47 S.W.3d 721, 724 (Tex. App.-Houston [14th Dist.] 2001, pet. denied)). We may then either affirm the judgment or reverse and render the judgment the trial court should have rendered, including one that denies both motions. Id. If, however, resolution of the issues rests on disputed facts, then summary judgment is inappropriate, and we should reverse and remand for further proceedings. Id.

         When, as here, the trial court's order granting summary judgment does not specify the grounds upon which it was granted, we affirm the judgment if any of the theories advanced in the motion is meritorious. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989). In other words, an appellant must show that each independent argument advanced in the motion is insufficient to support the summary judgment. Collins v. Allied Pharmacy Mgmt., Inc., 871 S.W.2d 929, 932 (Tex. App.-Houston [14th Dist.] 1994, no writ).

         B. Attorney-immunity defense

         In his first issue, Sheller argues that the trial court erred in granting CTS Defendants' motion for summary judgment "when there were material issues of law and fact which all favored . . . Sheller." Because the trial court did not specify on which ground it granted CTS Defendants' motion, we consider whether any ground they asserted supports the summary judgment.

         One of the grounds CTS Defendants advanced was attorney immunity. Attorney immunity is an affirmative defense that protects attorneys from liability to nonclients.[8]Cantey Hanger, 467 S.W.3d at 481 (citing Sacks v. Zimmerman, 401 S.W.3d 336, 339- 40 (Tex. App.-Houston [14th Dist.] 2013, pet. denied); Kruegel v. Murphy, 126 S.W. 343, 345 (Tex. Civ. App. 1910, writ ref'd)). The purpose of the attorney-immunity defense is to ensure loyal, faithful, and aggressive advocacy to clients. Id. To be entitled to summary judgment, CTS Defendants must have proven that there was no genuine issue of material fact as to whether their conduct was protected by attorney immunity and that they were entitled to judgment as a matter of law. See id.

         According to Sheller, the Texas Supreme Court's decision in Cantey Hanger v.Byrd does not ...


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