Court of Appeals of Texas, Fifth District, Dallas
ERIK L. NELSON, Appellant
JACK SHEEDY, ROGER CRABB, AND SCHEEF & STONE, L.L.P., Appellees
Appeal from the County Court at Law No. 2 Dallas County,
Texas Trial Court Cause No. CC-15-01798-B
Justices Lang-Miers, Myers, and Boatright
ELIZABETH LANG-MIERS JUSTICE
Erik L. Nelson sued appellees Jack Sheedy, Roger Crabb, and
Scheef & Stone, L.L.P. (the lawyers) for legal
malpractice concerning advice they gave him about the meaning
of language in an agreement. The trial court granted summary
judgment in favor of the lawyers. In two issues, Nelson
argues that the trial court erred in granting no-evidence and
traditional summary judgment. We affirm.
owned 1, 000 shares and Deepak Ahuja owned 429 shares of
Nelson Architectural Engineers, Inc. (Company). Nelson and
Ahuja entered into an Agreement of Shareholders that included
mandatory buy-sell provisions in article III. In article VIII,
it also stated the purchase price of shares and terms if
certain events or conditions occurred.
January 2014, Ahuja made an "Initialed Offer" under
section 3.3 of the shareholder agreement for Nelson to buy
Ahuja's 429 shares at $10, 800 per share. Ahuja stated
that the price represented his assessment of the value of his
shares as permitted under section 3.5 of the shareholder
asked Crabb and Sheedy for their legal advice regarding
Ahuja's demand. After a meeting, Nelson asked via e-mail
for Crabb to "confirm or advise" as to
whether "[t]he response to the [']initialed
offer['] can accept Deepak's sale of all his shares
but counter the value with a different or lower cost per
share without it being 'flipped' back on [him], the
respondent." Crabb replied that he and Sheedy confirmed
that he could. Nelson asked further questions that assumed
"we respond with an acceptance of his [']initialed
offer['] of all of his 429 shares but counter with a
different price generally following Article 8[.]" Nelson
asked Crabb if his response or counter would bind Ahuja to
article 8 of the shareholder agreement, and Crabb replied
that it would. Crabb stated, "OUR ANALYSIS IS THAT
DEEPAK COULD MAKE AN OFFER WITH A PRICE THAT HE CHOSE - HENCE
THE USE OF THE WORD "MAY" IN THE FIRST PARAGRAPH OF
3.3, AND IN 3.5. BUT THE INITIAL LANGUAGE OF 8.1 USES THE
WORD "SHALL" - WHICH MAKES THE VALUATION MECHANISM
IN THAT SECTION MANDATORY, AND TO REMOVE ANY AMBIGUITY, 8.1
ALSO REFERENCES ARTICLE III TRANSACTIONS AS FALLING WITHIN
THE UNIVERSE OF TRANSACTIONS GOVERNED BY THAT SECTION."
Nelson also asked:
Can he argue Article 8 doesn't apply to the Article 3 put
clause? He mentioned to me he thought the language was
"binary", either I accept or I flip- no other
options. This makes me think he doesn't believe Article 8
applies. Is he wrong? I am trying to get 100% confidence
level that it does apply.
replied, "HE IS WRONG AND THE AGREEMENT CLEARLY MANDATES
THAT ARTICLE VIII APPLIES."
January 24, 2014, Nelson responded to Ahuja's offer by
letter. Nelson stated that, as Ahuja mentioned in his letter,
article III of the shareholder agreement "does indeed
permit" Ahuja "to make a personal assessment of the
value of [his] shares." But Nelson then stated, "I
note that Article VIII of our Agreement, which you did not
mention as having any bearing on share value, specifies that
any shares which are to be purchased under Article III
'shall be purchased at the fair market value
thereof.'" And Nelson noted that article VIII
specified how the fair market value of the shares was to be
determined. Nelson then stated, "I accept your offer to
sell all of your shares to me, and my valuation of your
shares is $611, 754.00, or $1426.00 per share."
February 7, 2014, Ahuja responded by letter to Nelson:
As your January 24, 2014 letter correctly points out, I am
permitted to make an assessment of my shares' value, and
I have done that in accord with Section 3.3 of the Agreement.
Your valuation of the Initialed Offer and the fair market
value process you have suggested are irrelevant to this
process. The Initialed Offer gave you two choices, and you
made neither of those. Therefore, you are deemed to have
accepted the Initialed Offer I made.
stated that closing of the share purchase would take place on
March 4, 2014 and attached closing documents to his
following week, Nelson and the Company sued Ahuja for breach
of contract, breach of fiduciary duty, and other claims. They
engaged different attorneys to file the lawsuit. Nelson and
the Company alleged that Ahuja "insist[ed] on ignoring
the fair market value determination" for his shares as
required by the shareholder agreement and "has, and
continues to, refuse to sell his shares to Erik Nelson for
the fair market value as determined by the shareholder
agreement." The case settled with Nelson agreeing to pay
Ahuja $3, 950, 000 for all of Ahuja's shares in the
then sued the appellee lawyers for negligence/negligent
misrepresentation, legal malpractice, and breach of fiduciary
duty. Nelson alleged that Sheedy "failed to draft the
Agreement properly" and the lawyers "failed to
properly advise" Nelson "regarding the application
of the Agreement to a transaction between" Nelson and
Ahuja. The lawyers answered, asserting a general denial and
affirmative defenses. The trial court granted the
lawyers' motion for leave to designate responsible third
parties. The trial court subsequently granted summary
judgment to the responsible third parties on Nelson's
claims against them and granted summary judgment to the
lawyers on all of Nelson's claims except for a claim of
professional negligence based on the advice the lawyers gave
to Nelson in 2014.
lawyers later moved for traditional and no-evidence summary
judgment on the remaining professional negligence claim. The
trial court granted the motion for summary judgment without
specifying the grounds. Nelson then filed this appeal.
of Review and Applicable Law
review a trial court's grant of summary judgment de novo.
Starwood Mgmt., LLC v. Swaim, 530 S.W.3d 673, 678
(Tex. 2017). We review the summary-judgment evidence in the
light most favorable to the party against whom the summary
judgment was rendered, crediting evidence favorable to that
party if reasonable jurors could, and disregarding contrary
evidence unless reasonable jurors could not. Mann
Frankfort Stein & Lipp Advisors, Inc. v. Fielding,
289 S.W.3d 844, 848 (Tex. 2009). Because the trial
court's order does not specify the grounds for granting
summary judgment, we must affirm the summary judgment if any
of the theories presented to the trial court and preserved
for appellate review are meritorious. Provident Life
& Accident Ins. Co. v. Knott, 128 S.W.3d 211, 216
(Tex. 2003). The party moving for traditional summary
judgment must show that no genuine issue of material fact
exists and it is entitled to judgment as a matter of law.
Tex.R.Civ.P. 166a(c); see Mann Frankfort, 289 S.W.3d
at 848. In a no-evidence motion for summary judgment, the
nonmovant must present evidence that raises a genuine issue
of material fact on the challenged elements of its claim.
Tex.R.Civ.P. 166a(i); see Sw. Elec. Power Co. v.
Grant, 73 S.W.3d 211, 215 (Tex. 2002).
prevail on a claim for legal malpractice, "the client
must establish that (1) the lawyer owed a duty of care to the
client; (2) the lawyer breached that duty; and (3) the
lawyer's breach proximately caused damage to the
client." Rogers v. Zanetti, 518 S.W.3d 394, 400
(Tex. 2017); see Stanfield v. Neubaum, 494 S.W.3d
90, 96 (Tex. 2016). "In every case, the plaintiff must
supply a causal link between the attorney's alleged
negligence and the client's damages."
Rogers, 518 S.W.3d at 404. "A lawyer can be
negligent and yet cause no harm." Id. at 400.
"And, if the breach of a duty of care does not cause
harm, no valid claim for legal-malpractice exists."
Id. "[A]lthough causation is typically a
question of fact, it may be determined as a matter of law
when reasonable minds could not arrive at a different
conclusion." Id. at 401.
cause has two components: cause in fact and foreseeability.
Id. at 402. "Cause in fact must be established
by proof that (1) the negligent act or omission was a
substantial factor in bringing about the harm at issue, and
(2) absent the negligent act or omission ('but for'
the act or omission), the harm would not have occurred."
Akin, Gump, Strauss, Hauer & Feld, L.L.P. v.
Nat'l Dev. & Res. Corp., 299 S.W.3d 106, 122
(Tex. 2009); Rogers, 518 S.W.3d at 403 ("[O]ur
cause-in-fact standard requires not only that the act or
omission be a substantial factor but also that it be a
but-for cause of the injury or occurrence.").
Foreseeability "addresses the proper scope of a
defendant's legal responsibility for negligent conduct
that in fact caused harm" and "asks whether the
harm incurred should have been anticipated and whether policy
considerations should limit the consequences of a
defendant's conduct." Rogers, 519 S.W.3d at
402. "Causation must be proved, and conjecture, guess,
or speculation will not suffice as that proof."
Akin, Gump, Strauss, Hauer & Feld, L.L.P., 299
S.W.3d at 122.
of his first issue, Nelson argues that the trial court erred
in granting no-evidence summary judgment because he produced
more than a scintilla of evidence of causation. Nelson
contends that he testified that-"had the lawyers advised
him properly" and told him that "the Article VIII
appraisal process did not apply"-he would have
"flipped the deal" and, as a result, "pocketed
$10.8 million, " and opened a competing company. Nelson
also argues that his expert witness on causation, Jeff
Levinger, testified to proximate cause. He contends that,
taken together, the testimony by Nelson and Levinger
constitute more than a scintilla of evidence on causation.
The lawyers argue that the trial court properly granted
no-evidence summary judgment because Nelson did not submit
competent summary judgment evidence to raise a fact issue on
parties disagree about two issues: (1) what testimony-expert
or lay-the court could consider concerning causation and (2)
whether Nelson submitted more than a scintilla of evidence of
and Lay Testimony
lawyers contend that Nelson "does not dispute" that
expert testimony was required to establish causation and that
Nelson "relied solely" on the expert testimony of
attorney Jeff Levinger to establish causation. In response,
Nelson contends that the lawyers' "entire argument
on proximate cause is flawed because no expert testimony is
in a legal malpractice case, expert witness testimony is
required to rebut a defendant's motion for summary
judgment challenging the causation element."
Swaim, 530 S.W.3d at 679. "And when the causal
link is beyond the jury's common understanding, expert
testimony is necessary." Alexander v. Turtur &
Assocs., Inc., 146 S.W.3d 113, 119-20 (Tex. 2004). But
"[i]n some cases the client's testimony may
provide" the "causal link between the
attorney's negligence and the client's harm."
Id. at 119. Nelson argues that, if he proves a
breach of the standard of care, "proximate cause becomes
a factual matter (Nelson would have flipped the deal and
Ahuja would have funded it) within the understanding of an
average juror." And he contends that, because other
expert testimony proves breach of the standard of care,
"lay testimony from Nelson and Ahuja establishes
causation[.]" Nelson cites Streber v. Hunter,
221 F.3d 701, 726-27 (5th Cir. 2000), as authority for this
Streber is distinguishable. In Streber, a
jury found attorneys liable for legal malpractice and other
claims based on attorneys' tax advice and advice not to
settle litigation. Id. at 717. Considering the
malpractice claim on appeal, the court agreed with the
client's contention that "[a]ny rational juror, who
could do simple math, could understand that [the client] was
severely damaged as a direct result of [the attorneys'
actions]." Id. at 726. The court concluded
that, in that case, where an expert established negligence
and breach of fiduciary duties, "lay testimony was
sufficient to establish causation." Id. The
court noted that several witnesses testified that the client
would have paid the tax but did not pay it "based solely
on her attorneys' advice[, ]" the client testified
that she would have settled but did not because of her
attorneys' advice, and the client testified as to the
"specific financial losses failing to settle caused
her." Id. at 727. The court concluded ...