Donald Young and Doris Young v. Dwayne R. Day, P.C. and Dwayne R. Day ( 2017 )

Opinion issued May 16, 2017
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-16-00325-CV
———————————
DONALD YOUNG AND DORIS YOUNG, Appellants
V.
DWAYNE R. DAY, P.C. AND DWAYNE R. DAY, Appellees
On Appeal from County Court at Law No. 3
Galveston County, Texas
Trial Court Case No. CV0072910
MEMORANDUM OPINION
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.
Background
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,1 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.).
1
The Youngs fired Tylka and later retained Day to represent them.
2
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
3
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 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.
4
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).
5
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
6
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
7
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.”
8
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 the 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.]
9
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).
10
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 (Tex. App.—Houston
[14th Dist.] Nov. 29, 2011, no pet.) (mem. op.) (concluding client’s claims for fraud,
breach of fiduciary duty, and breach of contract were claims for professional
negligence where client alleged attorney drafted habeas petition that attorney “knew
would fail”).
11
4. DTPA
In their original brief, the Youngs argue that the trial court erred in granting
summary judgment on their DTPA claim because Day did not seek dismissal of the
DPTA claim in his summary judgment motion. In their reply brief, they contend
that the allegations underlying their DTPA claim are not the same as those alleged
in support of their other claims and, therefore, they have not fractured their DTPA
claim.
After Day filed his summary judgment motion, the Youngs filed a
supplemental petition to include a DTPA claim. Day contends that although his
summary judgment motion did not expressly address the Youngs’ DTPA claim
because the Youngs had not made the claim before he filed his motion, the
allegations underlying their DTPA claim are the same as those alleged in their other
claims and are not distinct from their negligence claim. Thus, he argues, the
anti-fracturing argument presented in his summary judgment motion was
sufficiently broad to encompass the Youngs’ DTPA claim and therefore he was not
required to amend the motion. We agree.
Generally, a party may not be granted summary judgment on a claim not
addressed in a summary judgment proceeding. See Bauer-Pileco, Inc. v. Harris Cty.
Appraisal Dist., 443 S.W.3d 304, 314 (Tex. App.—Houston [1st Dist.] 2014, pet.
denied); Reule v. Colony Ins. Co., 407 S.W.3d 402, 414 n.15 (Tex. App.—Houston
12
[14th Dist.] 2013, pet. denied). Nevertheless, summary judgment may be proper
when the original motion is broad enough to encompass the newly asserted claims.
Rotating Servs. Indus., Inc. v. Harris, 245 S.W.3d 476, 487 (Tex. App.—Houston
[1st Dist.] 2007, pet. denied).
In their supplemental petition, the Youngs alleged that Day engaged in
unconscionable conduct in violation of DTPA section 17.50(a)(3) by (1) divulging
to Di Ferrante confidential communications between the Youngs and Day and
communications regarding settlement offers made to the Youngs and (2) failing to
relay the $200,000 settlement offer to them. The Youngs alleged these same facts
in support of their other claims.2 See West, 2008 WL 2941854, at *2; Judwin Props.,
Inc., 911 S.W.2d at 506. By establishing that the Youngs were not permitted to
fracture their legal malpractice claim into a breach of fiduciary claim, Day’s motion
was sufficiently broad to encompass the Youngs’ later-filed DTPA claim based on
the same allegations. See Reule, 407 S.W.3d at 414 n.15; see also Nall v. Plunkett,
404 S.W.3d 552, 555–56 (Tex. 2013) (holding traditional summary judgment
challenge to duty element of social host liability claim broad enough to encompass
duty element of negligent undertaking claim).
2
In their brief, the Youngs state that “[t]they 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.”
13
In summary, we conclude that the allegations upon which the Youngs rely to
support their breach of fiduciary duty, fraud, and DTPA claims are nothing more
than their claims for professional negligence under alternative labels. Accordingly,
the trial court did not err in concluding that these claims constituted impermissible
fracturing of the Youngs’ professional negligence claim.3
5. Professional Negligence Claim
The Youngs argue that the trial court erred by granting summary judgment on
their professional negligence claim against Day. In support of their claim, they
alleged that Day failed to file suit against CLRH before the statute of limitations
expired. In the Clapsaddle lawsuit, they alleged that Day failed to call certain
witnesses to testify at trial, designate his own expert medical witness, and convey
the $200,000 settlement offer to them. We examine each of these grounds below.
a. Applicable Law
To prevail on a legal malpractice claim, a plaintiff must show “that (1) the
attorney owed the plaintiff a duty, (2) the attorney breached that duty, (3) the breach
3
Because the Youngs present no argument as to why their claims for breach of
contract and negligent misrepresentation are distinct from their professional
negligence malpractice claim and therefore not subject to the anti-fracturing rule,
they have not preserved this issue for our review. See Kris William, Inc. v.
Tranquility Lakes Owners Ass’n, Inc., No. 01-13-00934-CV, 2015 WL 5770019, at
*5 (Tex. App.—Houston [1st Dist.] Sept. 29, 2015, no pet.) (mem. op.) (concluding
plaintiffs’ failure to challenge summary judgment grounds regarding claim required
court to affirm summary judgment as to that claim).
14
proximately caused the plaintiff’s injuries, and (4) damages occurred.” Alexander
v. Turtur & Assocs., Inc., 146 S.W.3d 113, 117 (Tex. 2004). Claims for legal
malpractice are based in negligence and are governed by the two-year statute of
limitations. TEX. CIV. PRAC. & REM. CODE ANN. § 16.003 (West 2014). A legal
malpractice claim accrues when the client sustains a legal injury or when the client
discovers or should have discovered through the exercise of reasonable care and
diligence the facts establishing the elements of the claim. See Willis v. Maverick,
760 S.W.2d 642, 646 (Tex. 1998); Nowak v. Pellis, 248 S.W.3d 736, 739 (Tex.
App.—Houston [1st Dist.] 2007, no pet.).
b. Failure to Timely File Suit Against CLRH
In their amended petition, the Youngs alleged, in relevant part:
Approximately two months prior to September 28, 2009, Day on behalf
of [Dwayne R. Day, P.C.], and Plaintiffs entered into an oral agreement
for Defendants to sue CLRH for Plaintiffs.4 When Day had not filed
suit and the statute of limitations was fast approaching, Doris called
Day [approximately one day before the limitations deadline], who
falsely claimed that he never told Plaintiffs that he would file suit on
their behalf for CLRH. Day, believing that Plaintiffs might file a pro
se petition suing CLRH, told Plaintiffs that they would have to send a
75-day letter to extend the statute of limitations, which was due to
expire on September 28, 2009. Day never told Plaintiffs what they
needed to include in the letter or what they needed to do. Day[’]s false
statements and delaying tactics caused Plaintiffs to miss the deadline to
sue CLRH.
4
The Youngs claimed that Donald suffered residual effects from the vehicular
accident and was admitted a second time to CLRH on September 28, 2007, and that
he suffered additional injuries while a patient at the hospital.
15
Based on these allegations, it is clear that the Youngs were aware that the
limitations period on filing suit against CLRH was set to expire on September 28,
2009. The Youngs’ alleged injury therefore accrued on September 29, 2009, the day
after limitations expired. Since the applicable statute of limitations is two years, the
Youngs had to bring their legal malpractice claim against Day based on his failure
to file suit against CLRH no later than September 29, 2011. However, the Youngs
did not file suit against Day until October 8, 2014 (and did not request service of the
suit on Day until February 16, 2015)—more than five years after their CLRH-related
claim accrued.
The discovery rule does not apply to the Youngs’ claim relating to Day’s
failure to sue CLRH because the Youngs admitted in their petition that Doris was
aware that Day denied having agreed to sue CLRH on the Youngs’ behalf, and that
the deadline to file suit would expire on September 28, 2009. The Youngs’
professional negligence claim based on Day’s failure to sue CLRH is barred by
limitations.
c. Failure to Designate Medical Expert and Call Certain Witnesses,
Consideration of Youngs’ Creditors’ Judgments When Advising
About Settlement, and Disclosure of Confidential Information
In support of their professional negligence claim in the Clapsaddle lawsuit,
the Youngs also alleged that Day failed to designate an expert medical witness to
testify at the trial of the Clapsaddle lawsuit about Donald’s injuries and past and
16
future pain and suffering, instead opting to use the videotaped deposition testimony
of Clapsaddle’s medical expert. They also complained that Megan Cools, the
emergency medical technician who responded to the scene of the accident, was
permitted to testify through her prior videotaped deposition rather than in person,
and that Day never called as a witness the police officer who cited Clapsaddle as
being at fault in the accident. They further alleged that Day improperly considered
Di Ferrante’s judgments against the Youngs when advising them about settlement
as well as improperly disclosed confidential settlement information and other
attorney-client privileged information to Di Ferrante.
A review of the record reveals that the Clapsaddle lawsuit was tried on
September 7, 2010. The jury rendered its verdict on September 9, 2010, and the trial
court entered a take-nothing judgment against the Youngs on February 1, 2011. The
Fourteenth Court of Appeals affirmed the trial court’s judgment on June 14, 2012,
and denied the Youngs’ motion for rehearing on August 22, 2012. No further appeal
was sought. Based on these facts, the Youngs had to file suit on these claims arising
out of the Clapsaddle lawsuit no later than August 22, 2014, or at the latest, by
October 6, 2014, which was forty-five days after the Youngs’ motion for rehearing
17
was denied.5 They did not file suit until October 8, 2014—more than two years after
limitations for legal malpractice ran.
Further, neither the discovery rule nor the Hughes6 rule tolls the statute of
limitations as to these claims. The Youngs alleged that in the course of Day’s
representation of them in the Clapsaddle lawsuit, “they were frustrated with him
about the fact that he would promise to do things he did not do,” including failing to
designate an expert medical witness and call Cool or the responding officer as
witnesses at trial, considering the Youngs’ judgment creditors when advising them
about settlement, and disclosing confidential information to Di Ferrante. Because
the Youngs knew of these alleged facts giving rise to their negligence claim during
Day’s representation, the discovery rule does not apply. The Hughes rule tolls the
statute of limitations of a legal malpractice claim “until all appeals on the underlying
claim are exhausted or the litigation is otherwise finally concluded.” Apex Towing
v. Tolin, 41 S.W.3d 118, 121 (Tex. 2001). Here, the Youngs’ appellate remedies
were exhausted on August 22, 2012, or at the latest, on October 6, 2012. They did
5
Under Rule of Appellate Procedure 53.7, a party must file a petition for review with
the Texas Supreme Court within forty-five days after the date the court of appeals
rendered judgment or the date of the court of appeals’ last ruling on all timely filed
motion for rehearing or en banc reconsideration. See TEX. R. APP. P. 53.7.
6
Hughes v. Mahaney & Higgins, 821 S.W.2d 154 (Tex. 1991).
18
not file suit until October 8, 2014. Therefore, these claims arising against Day out
of the Clapsaddle lawsuit are time barred.
d. Failure to Convey $200,000 Settlement Offer
In support of their professional negligence claim, the Youngs also alleged
After Defendants answered this suit, Plaintiffs’ attorney, Ronald M,
Hall (“Hall”), received two Adobe Acrobat pdf files purporting to be a
contract and refusal of settlement offer allegedly signed by Plaintiffs.
Plaintiffs knew that they had never signed a contract with Day and they
knew that Day had never told them that he had received a settlement
offer of $200,000.
The Youngs each executed a sworn, notarized affidavit in which they averred,
among other things, that they had not been told about the $200,000 settlement offer,
that they had not signed the September 6, 2010 settlement memorandum reflecting
their refusal to accept the offer and their desire to proceed to trial, and that they
would have accepted the $200,000 offer. These affidavits were attached as exhibits
to their summary judgment response.
The Youngs argue that the trial court erred in granting summary judgment
because their affidavits were competent summary judgment evidence that raised a
genuine issue of material fact as to whether Day breached his duty by failing to
inform them of the settlement offer. They assert that because they were not aware
of the settlement offer until Day produced the memorandum in April 2015, the
discovery rule tolled their professional negligence action based on this claim.
19
The September 6, 2010 memorandum from Day to the Youngs states, in
relevant part:
In light of the following factors, I, Dwayne R. Day, am
recommending that the Young’s [sic] settle this matter and avoid going
to trial on 9/7/2010 at 9am in Galveston County:
1. The defendant is offering to settle this matter for
$200,000[.]
....
Therefore, I believe that the current offer on the table is a very good
offer under the circumstances and I am recommending that the Young’s
[sic] accept the offer in full and final settlement of this matter.
However, if the Young’s [sic] choose to ignore my advice and “put this
in the hands of the jury” I will honor their wishes and, to the best of my
ability, try to obtain a favorable outcome for all.
Dwayne R. Day
_________________ 9/6/10
Receipt of this Memorandum is hereby acknowledged by:
Donald L. Young Trial ________
_________________ Settle ________
Doris A. Young Trial ________
_________________ Settle ________
The document reflects that Donald and Doris signed the memorandum and initialed
next to “Trial.” However, in their affidavits, the Youngs swear under oath “I was
never told about the $200,000 offer from [Clapsaddle’s attorney] and I never signed
any document on September 6, 2010 stating that I was refusing the offer. I would
have accepted the $200,000 offer.”
20
Day contends that the Youngs’ affidavits do not preclude summary judgment
because (1) the Youngs’ summary judgment response was deficient; (2) even
assuming that a fact issue exists as to whether Day failed to inform the Youngs about
the settlement offer, the Youngs failed to present expert testimony that the alleged
failure breached the applicable standard of care; (3) a fact issue does not exist
because a trial court does not have to consider summary judgment evidence that is
unreasonable or incredible; and (4) the statements in the Youngs’ affidavits do not
raise a fact issue.
With regard to the argument that the Youngs’ summary judgment response
was deficient, Day asserts that other than incorporating the affidavits into their
response, they neither cited to nor explained the applicability of the affidavits. In
their summary judgment response, the Youngs stated that after Day filed his answer,
they received a pdf file of the September 6, 2010 memorandum purporting to be their
refusal of the $200,000 settlement offer. They further stated that Day had never told
them that he had received a settlement offer of $200,000. They argued that “[t]here
is a genuine issue of material fact as to whether Donald and Doris knew about the
$200,000 settlement offer which they have denied and which they deny signing the
refusal of the settlement on September 6, 2015 [sic].” The Youngs’ summary
judgment response to which their affidavits were attached was not deficient in this
regard.
21
With regard to his second argument, Day contends that even assuming a fact
issue exists as to whether he failed to inform the Youngs about the settlement offer,
the Youngs failed to present expert testimony that a failure to convey the offer
breached the applicable standard of care. He argues that he knew that the Youngs
wanted to have any settlement structured so that they could unethically and illegally
avoid their creditors. He asserts that he knew that the Youngs would not approve
any settlement that paid Di Ferrante for his judgments because they believed that his
judgments against them were invalid. Day argues that because of these allegedly
unethical and illegal motives on the part of the Youngs, he did not have an automatic
duty to inform them of the settlement offer. Day argues that the Youngs were
required to present expert testimony that Day had such a duty under the
circumstances and breached that duty.
A summary judgment 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., 289 S.W.3d at 848. 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 cause. See
Sci. Spectrum, 941 S.W.2d at 911. As the movant, Day bore the burden to disprove
that he owed a duty to the Youngs to convey the settlement offer to him or that he
22
breached that duty. Day did not bring forward expert testimony to explain why he
had no duty to inform the Youngs of the settlement offer based on their alleged
unethical and illegal motives. Therefore, the Youngs were not required to bring forth
expert testimony themselves. Zenith Star Ins. Co. v. Wilkerson, 150 S.W.3d 525,
530–31 (Tex. App.—Austin 2004, no pet.) (“Once the defendant in a legal
malpractice suit has submitted expert testimony on the standard of care, the plaintiff
is then required to controvert the expert testimony with other expert testimony.”)
(citing Anderson v. Snider, 808 S.W.2d 54, 55 (Tex. 1991)); Hall v. Rutherford, 911
S.W.2d 422, 424 (Tex. App.—San Antonio 1995, writ denied) (noting that once
expert opinion established that defendant attorney’s acts conformed to standard of
care, plaintiff must offer expert testimony to contradict defendant’s expert
testimony).7
7
In a post-submission letter, Day asserts that the recent decision by the Texas
Supreme Court in Rogers v. Zanetti is analogous to the present case. See __ S.W.3d
__, 2017 WL 1553154 (Tex. Apr. 28, 2017). In that case, Rogers sued his former
attorneys and their law firm for legal malpractice arising out of a failed investment
by Rogers in a home healthcare company. See id. at *1. Rogers alleged that the
defendant attorneys were negligent because, among other things, they failed to
communicate a settlement offer to settle the case and transfer full ownership of the
business to Rogers for $450,000. See id. at *12. The Supreme Court concluded that
Rogers’s testimony “that he would have tried to settle the case had he known about
the offer” was no evidence that Rogers would have settled the underlying suit for
$450,000. Id. The Rogers decision is distinguishable from the case before us.
There, the Court rejected Rogers’s argument that “evidence of the offer’s existence
and his willingness to explore settlement was sufficient to raise a fact issue” on
causation and defeat summary judgment. Id. Here, in contrast, the Youngs averred
in their affidavits, “I would have accepted the $200,000 offer.”
23
Day also argues that no fact issue exists because a trial court does not have to
consider summary judgment evidence that is unreasonable or incredible. Day argues
that the Youngs’ claim that Day failed to inform them about the $200,000 settlement
offer is nonsensical given their allegation that Day “just wanted them to settle for
any amount,” and the fact that the offer would have provided Day a contingency fee
instead of having to try their problematic personal injury claim. Day further argues
that this theory is even more absurd in light of Day’s handwriting expert’s opinion
that the signatures on the September 6, 2010 memorandum belonged to the Youngs.
Thus, he argues, because no reasonable juror could believe the evidence that Day
withheld the settlement from the Youngs, no fact issue exists and Day conclusively
disproved the Youngs’ claim.
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, 168 S.W.3d at
816. We are required by the law to 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, 185 S.W.3d at 846. An appellate
court is not allowed to weigh the credibility of witnesses and we cannot, on our own,
conclude that no reasonable juror could believe the Youngs’ sworn denial of their
signatures on the relevant documents. See City of Keller, 168 S.W.3d at 819 (noting
it is province of jury to resolve conflicts in evidence). Day has not conclusively
24
disproved their claim of non-signature which is inherently within the province of the
trier of fact.
Finally, Day argues that the Youngs’ actual statements in their affidavits do
not raise a fact issue. Day contends that “[t]the Youngs, aware of the ramifications
of perjury, meticulously worded their affidavits so as to try and raise a fact issue
without denying that they received and signed the memorandum.” In support of this
argument, Day points to the fact that the Youngs’ assertions in their affidavits that
“I was never told about the $200,000 offer from Mr. Fanaff and I never signed any
documents on September 6, 2010 stating that I was refusing the offer,” are true
because the memorandum states that Clapsaddle (not Fanaff) made the settlement
offer, and there is no express language in the memorandum whereby the Youngs
stated that they were refusing the offer (instead, they signed and initialed on the line
indicating that they wanted to proceed to trial). Thus, Day claims, the Youngs’
affidavits do not actually contradict their having signed the memorandum and do not
create any fact issues. We cannot adopt such a strained reading of the Youngs’
affidavits. See Diversicare, 185 S.W.3d at 846.
In summary, after applying the rule against fracturing, we conclude that the
Youngs’ only claim was for professional negligence, and that this claim was based
on the allegations that Day failed to (1) file suit against CLRH before the statute of
limitations expired; (2) call certain witnesses to testify at trial or designate his own
25
expert medical witness; and (3) convey the $200,000 settlement offer to them. We
conclude that the trial court properly granted summary judgment on the Youngs’
professional negligence action based on the first two allegations because these
claims are barred by the statute of limitations. As for the remaining allegation that
Day failed to convey the $200,000 settlement offer to the Youngs, we conclude that
the trial court erred in granting summary judgment because Day has not established
as a matter of law that he was entitled to summary judgment. Accordingly, we
sustain the Youngs’ first issue in part and overrule it in part.8
Discovery Motions
In their second issue, the Youngs argue that the trial court abused its discretion
in failing to rule on certain of their discovery motions prior to granting summary
judgment on their claims. Having concluded that Day was not entitled to summary
judgment on a portion of the Youngs’ professional negligence claim, the case must
be remanded to the trial court for further proceedings. Thus, we do not reach the
issue of whether the trial court abused its discretion in failing to rule on the Youngs’
discovery motions prior to granting summary judgment.
8
Because the Youngs have not challenged the summary judgment granted as to their
claim for declaratory relief, they have waived this issue for appellate review. See
Kris William, Inc., 2015 WL 5770019, at *5.
26
Conclusion
We affirm the trial court’s judgment in part, reverse in part, and remand for
additional proceedings consistent with this opinion.
Russell Lloyd
Justice
Panel consists of Chief Justice Radack and Justices Brown and Lloyd.
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