Recent Texas Legal Malpractice Opinions

Texas appellate courts have released two new legal malpractice opinions in the last two months.  In December, the Dallas Court of Appeals issued an opinion in Murphy v. Gruber, 2007 Tex. App. Lexis 9707 (December 13, 2007).  The plaintiff alleged that the defendant law firm acted negligently and breached its fiduciary duties by representing multiple parties in a case when there was a conflict among the parties.  The key issue on appeal was whether the claims were really legal malpractice/negligence claims (which would be barred by limitations) or whether they were breach of fiduciary duty claims (which would not be barred).  Although the distinction in type of claim is critical, the Texas appellate courts have a long history of confusing and conflicting decisions on the matter.

The plaintiffs alleged that the attorneys failed to disclose the conflict of interest, made false statements about the viability of the client’s claims so the client would accept a settlement, and divided the settlement proceeds 50/50 between the two underlying plaintiffs even though the strength of their cases were not equal.  The Court of Appeals waded through some of the appellate history and found that the claim was a legal malpractice claim barred by limitations.  In rejecting the argument that the claims were breach of fiduciary duty claims, the Court concluded that the client was not alleging “that the lawyers deceived them, pursued their own pecuniary interests over the [clients’] interests, or obtained any improper benefit by continuing to represent both clients.”   And yet, that seems to be exactly what the client was alleging — that the lawyers failed to disclose this conflict of interest and made these false representations so that the attorneys’ could “earn” a large contingent fee even if the settlement wasn’t in the best interest of both the clients.  That is a classic breach of fiduciary duty, and I think the Court of Appeals got the decision wrong.

Earlier this week, the San Antonio Court of Appeals handed down the decision of Bustos v. Schwabe, Williamson & Wyatt, PC, 2008 Tex. App. Lexis 424 (January 23, 2008).  This is a less remarkable case involving a fee dispute and legal malpractice counterclaims.  The facts and law are not interesting, but the result, a granting of the law firm’s motion for summary judgment on the amount of fees it was owed and a dismissal of the client’s counterclaims, shows the danger of attempting to handle a case pro se.  It appears from the limited facts of the case that the pro se client could have prevented the judgment and the dismissal of his claims if he had a lawyer there to make sure that he followed proper procedure.

Posted on: February 9, 2008 | Tagged

Perlmutter & Schuelke, PLLC maintains offices in Austin, Texas. However, our attorneys and lawyers represent clients throughout the state of Texas, including Dallas, Houston, San Antonio, Forth Worth, El Paso, New Braunfels, San Marcos, Kyle, Buda, Round Rock, Georgetown, Lockhart, Bastrop, Elgin, Manor, Brenham, Cedar Park, Burnet, Marble Falls, Temple and Killeen. By Brooks Schuelke


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