James O. Rogers, William M. Burmeister, Conservative Care, Inc. and Care Affiliates, Inc. v. Victor B. Zanetti, Charles L. Perry and Andrews Kurth, Llp ( 2017 )

IN THE SUPREME COURT OF TEXAS
444444444444
NO . 15-0557
444444444444
JAMES O. ROGERS, WILLIAM A. BURMEISTER, CONSERVATIVE CARE, INC. AND
CARE AFFILIATES, INC., PETITIONERS,
v.
VICTOR B. ZANETTI, CHARLES L. PERRY AND ANDREWS KURTH, LLP,
RESPONDENTS
4444444444444444444444444444444444444444444444444444
ON PETITION FOR REVIEW FROM THE
COURT OF APPEALS FOR THE FIFTH DISTRICT OF TEXAS
4444444444444444444444444444444444444444444444444444
Argued January 11, 2017
JUSTICE DEVINE delivered the opinion of the Court.
JUSTICE GUZMAN did not participate in the decision.
This appeal concerns a summary judgment in a legal-malpractice action. The court of
appeals affirmed the summary judgment in the defendant attorneys’ favor, concluding that no
summary-judgment evidence existed to raise a fact issue as to causation, an essential element of the
clients’ malpractice claim. ___ S.W.3d ___ (Tex. App.—Dallas 2015) (mem. op.). We agree and
affirm.
I. Background
The underlying malpractice action arises out of a failed investment by James Rogers in a
home-healthcare company. The company was initially funded by its founding members: Daniel
Alexander; his wife, Leslie Alexander; and Judith Pucci. After creating a limited liability company
and obtaining the necessary licenses, the founding members began operations as Accent Home
Health in 2002. By the end of the year, Accent was making a profit and came to Rogers’ attention.
Rogers contacted Accent’s founders, expressing an interest in their business. Rogers
represented himself to be the owner of outpatient clinics with substantial contacts in the medical
community. He also represented himself as an active investor with substantial resources and an
interest in helping Accent grow its business. He told the founders that his background and
connections would greatly enhance Accent’s potential and that he and his other companies could
provide administrative services to the growing company. Probably of most significance to the
founders, Rogers represented that he had money to commit to Accent’s expansion. Rogers offered
to provide his services and a financial commitment of $250,000 in return for a majority interest in
Accent’s future business. The founders eventually agreed to these terms, and Rogers had his
attorney, Victor Zanetti, draft an investment agreement.
Rogers obtained the founders’ signatures to the agreement and thereafter gained access to
Accent’s financial accounts. At about this same time, Rogers introduced Accent’s founders to
William Burmeister, a certified public accountant and the chief financial officer of Rogers’ other
healthcare entities. Burmeister subsequently assumed control of Accent’s receivables and other
financial matters, freeing the founders to devote their full time and attention to expanding the
business’s healthcare services.
Rogers, however, did not follow through with his financial commitment to the business but
instead began to draw on Accent’s accounts. After he transferred substantial sums from Accent’s
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bank to another bank account that only Rogers controlled, the founders became concerned. They
demanded access to the accounts in Burmeister’s hands and to the new bank account established by
Rogers. After obtaining additional information about Rogers’ activities, including his failure to
financially support the business as promised, the founders hired an attorney and filed suit. The
lawsuit named Rogers and Burmeister as defendants and asserted claims of fraud, conversion and
civil theft, civil conspiracy, and breach of fiduciary duty. The founders further sought a declaratory
judgment that the investment agreement with Rogers was void, or alternatively that Rogers had
breached the agreement. Two of Rogers’ companies that received some of Accent’s funds were also
joined as defendants.
After Rogers was sued, he asked his attorney, Zanetti, for a trial-attorney recommendation.
Zanetti recommended Charles Perry, and Rogers hired Perry to defend the Alexander case. Zanetti
knew Perry well because they practiced law together at the Andrews Kurth law firm. At some point
before trial, Andrews Kurth recommended that Rogers find new defense counsel, which he did.
A jury trial ensued. The jury found Rogers had defrauded Accent’s founders and that
Burmeister and Rogers’ two companies had knowingly participated. The trial court rendered
judgment on the verdict, awarding the damages found by the jury. In its final judgment, the trial
court also declared the investment agreement void because it was procured by fraud, was
unconscionable, and lacked consideration. The court of appeals thereafter affirmed the trial court’s
judgment in Rogers v. Alexander, 244 S.W.3d 370 (Tex. App.—Dallas 2007, pet. denied) (the
“Alexander case”).
3
Several years later, Rogers and the other defendants in the Alexander case (hereafter referred
to as “Rogers”)1 sued their former defense attorney, Perry; the attorney who drafted the investment
agreement, Zanetti; and the law firm at which they both practiced. Rogers alleged in the malpractice
suit that Perry should not have accepted employment as his defense counsel because Perry’s existing
relationship with Zanetti and their law firm, Andrews Kurth, created a conflict of interest. Rogers
further contended that the conflict caused Perry not to designate Zanetti and Andrews Kurth as
responsible third parties in the Alexander case, demonstrating that Perry was more interested in
protecting his associate, Zanetti, from the consequences of the negligently drafted investment
agreement than he was in defending Rogers. And although Perry withdrew from the defense before
the case was tried, Rogers complained that Perry’s negligence had already compromised his defense
by that time. Rogers submits that Perry’s negligence during the Alexander case included Perry’s
failure to advise Rogers of a settlement offer that might have ended the litigation, Perry’s failure to
designate a rebuttal expert on Accent’s value that led to an excessive damages award, and Perry’s
engagement in discovery misconduct that prejudiced Rogers’ defense. Rogers also alleged breach
of fiduciary duty and sought disgorgement of the fees paid to his attorneys.
Rogers’ former lawyers answered and moved for summary judgment. They argued, among
other grounds, that there was no evidence of causation, that the fraud finding in Alexander and
collateral-estoppel principles barred Rogers’ malpractice claim as did the statute of limitations, and
that Rogers’ fiduciary-breach claims were merely restated negligence claims. After Rogers’ response
1
Rogers’ co-plaintiff and petitioner, W illiam Burmeister, died after the filing of the petition for review in this
Court.
4
and a hearing on the motion, the trial court rendered summary judgment for the lawyers without
specifying the grounds. Rogers appealed, and the court of appeals affirmed. See ___ S.W.3d at ___,
___.
II. The Court of Appeals’ Decision
The court of appeals identified the principal appellate issue as whether Rogers, in responding
to the lawyers’ no-evidence motion, raised a genuine fact issue on the causation element of his
malpractice claim. Id. Holding that Rogers failed to raise such a fact issue, the court affirmed the
summary judgment. See ___ S.W.3d at ___. In making that determination, the court analyzed
Rogers’ causation evidence in the context of his various negligence complaints. Rogers alleged that
(1) Zanetti’s negligence in drafting the investment agreement caused the adverse Alexander
judgment, id. at ___; (2) Perry’s failure to raise a proportionate-responsibility defense caused
Rogers’ injury, id. at ___; (3) Perry’s failure to communicate a settlement offer caused Rogers’
injury, id. at ___; (4) Perry’s failure to designate a damages expert to rebut the Alexanders’ damages
model caused Rogers’ injury, id. at ___; and (5) Perry’s misconduct during discovery caused Rogers
to lose the Alexander case, id. at ___.
To prove a legal-malpractice claim, 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. Stanfield v. Neubaum, 494 S.W.3d 90, 96 (Tex. 2016). A lawyer can
be negligent and yet cause no harm. And, if the breach of a duty of care does not cause harm, no
valid claim for legal-malpractice exists. See, e.g., Alexander v. Turtur & Assocs., Inc., 146 S.W.3d
113, 119 (Tex. 2004) (noting that “an abundance of evidence as to [breach] cannot substitute for a
5
deficiency of evidence as to [causation]”). In brief, that is the court of appeals’ holding in this case:
Rogers failed to raise a fact issue about whether the lawyers’ claimed negligence caused his injury.
The parties do not argue about duty or breach here, and thus we assume for purposes of this
appeal that the lawyers’ alleged conduct fell below the standard of care. The issue is simply whether
Rogers’ summary-judgment evidence raised a material fact issue as to causation. ___ S.W.3d at ___.
And although 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. Mo. Pac. R.R. Co. v. Am. Statesman,
552 S.W.2d 99, 105 (Tex. 1977); Green v. McKay, 376 S.W.3d 891, 898 (Tex. App.—Dallas 2012,
pet. denied).
III. The Legal-Malpractice Claims
When a legal-malpractice case arises from prior litigation, the plaintiff must prove that the
client would have obtained a more favorable result in the underlying litigation had the attorney
conformed to the proper standard of care. Elizondo v. Krist, 415 S.W.3d 259, 263 (Tex. 2013). “The
traditional means of resolving what should have happened is to recreate the underlying case.” 4
RONALD E. MALLEN , LEGAL MALPRACTICE § 33:7 at 673 (2017). This re-creation is typically
referred to as the “case-within-a-case” or “suit-within-a-suit” and “is the accepted and traditional
means of resolving the issues involved in the underlying proceeding in a legal malpractice action.”
Id. at § 37.87 at 1695. Where the injury claimed does not depend on the merits of the underlying
action, however, the case-within-a-case methodology does not apply. See id. (listing examples such
as a lawyer’s misappropriation or misallocation of settlement proceeds); see also Elizondo, 415
6
S.W.3d at 270 (concluding that “‘suit within a suit’ analysis is not required in a [malpractice] case”
alleging negligent settlement).
Rogers’ primary argument here is that we should not apply this standard because it is
generally unfair and specifically inappropriate for most of his malpractice claims. Rogers narrows
those claims in this Court to four allegations of negligence, arguing that our traditional case-within-
a-case methodology should not apply to (1) Zanetti’s drafting errors in the investment agreement,
(2) Perry’s failure to join Zanetti and his law firm as responsible third-parties in the Alexander
litigation, (3) Perry’s failure to designate an expert to rebut the Alexanders’ valuation of Accent, and
(4) Perry’s failure to communicate a settlement opportunity in the Alexander litigation. Rogers
asserts that each of these errors contributed to his damages and that the court of appeals erred in
holding otherwise. We consider Rogers’ arguments in the context of his various malpractice
complaints.
A.
Did either negligence in drafting the investment agreement or the failure to raise
a proportionate-responsibility defense cause Rogers’ harm?
Because the findings in the Alexander case are material to both of these complaints, we
consider them together. In Alexander, the jury determined that Rogers defrauded Accent’s founders,
and the trial court rendered judgment on the jury’s verdict. The court of appeals thereafter affirmed,
concluding that the “case involved a course of fraud that led up to a void investment agreement.”
Alexander, 244 S.W.3d at 390. In their motion for summary judgment, the lawyers argued that
Alexander’s fraud finding conclusively negated the element of proximate causation in these
malpractice claims.
7
Rogers argues, however, that Zanetti’s drafting error was transactional malpractice that
contributed to his ultimate loss and was, at least in part, a cause of his ultimate damages. Rogers
argues further that this transactional malpractice requires a separate causation analysis that should
be measured under a more relaxed “substantial factor” test. Although Rogers does not otherwise
explain his preferred test, he concludes that, under this relaxed standard, evidence of causation exists
irrespective of the fraud findings in Alexander.
Citing our summary-judgment rule, the defendant lawyers respond that Rogers’ argument for
a new causation standard should “not be considered as grounds for reversal” here because it was not
raised below. See TEX . R. CIV . P. 166a(c) (“Issues not expressly presented to the trial court by
written motion, answer or other response shall not be considered on appeal as grounds for reversal.”).
But the lawyers also contend that Rogers cannot prevail even under his proposed new test because
Zanetti’s alleged drafting errors did not in fact cause him any harm. The lawyers submit that the
judgment in Alexander, which held that Rogers’ antecedent fraud voided the investment agreement,
makes it impossible for Rogers to establish that the drafting of the investment agreement—whether
negligent or not—was a cause in fact of Rogers’ damages.
As in other negligence cases, a legal-malpractice plaintiff must prove that his or her lawyer’s
negligence was the proximate cause of cognizable damage. Stanfield, 494 S.W.3d at 97; see also
1 MALLEN § 8:20 at 1029 (“The principles and proof of causation in a legal malpractice action do
not differ from those governing an ordinary negligence case.”). The components of proximate cause
consist of cause in fact and foreseeability. Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. Nat’l Dev.
& Research Corp., 299 S.W.3d 106, 122 (Tex. 2009). Cause in fact (sometimes referred to as
8
substantial factor) requires a showing that the act or omission was a substantial factor in bringing
about the injury and without which harm would not have occurred. HMC Hotel Props. II Ltd. P’ship
v. Keystone-Tex. Prop. Holding Corp., 439 S.W.3d 910, 913 (Tex. 2014); see also Transcon. Ins.
Co. v. Crump, 330 S.W.3d 211, 222 (Tex. 2010) (describing the elements of proximate cause as
“cause in fact (or substantial factor) and foreseeability”). “Substantial” here is used in its popular
sense “to denote that the defendant’s conduct has such an effect in producing the harm as to lead
reasonable men to regard it as a cause.” Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 472 (Tex.
1991) (citing RESTATEMENT (SECOND ) OF TORTS § 431, cmt. a (1965)). On the other hand,
foreseeability or legal cause addresses the proper scope of a defendant's legal responsibility for
negligent conduct that in fact caused harm. The legal-cause component asks whether the harm
incurred should have been anticipated and whether policy considerations should limit the
consequences of a defendant’s conduct. 1 MALLEN § 8:20 at 1035.
Rogers’ argument here is that our traditional formulation of the cause-in-fact component is
inappropriate for his particular malpractice claim. In his merits briefing, he asserts: “The
transactional malpractice (Zanetti’s drafting errors) and the litigation malpractice (Perry’s litigation
mistakes) are different claims that turn on different facts and, consequently, require a separate
causation analysis.” Beyond that, he does not elaborate on the standard’s contours other than to
conclude we “should apply the ‘substantial factor’ test.” But, of course, we do that as a part of any
proximate-cause analysis because our cause-in-fact standard already incorporates the substantial-
factor test.
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As we have stated: “The test for cause in fact is whether the negligent act or omission was
a substantial factor in bringing about injury, without which the harm would not have occurred.” Doe
v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 477 (Tex. 1995) (internal quotations
omitted). Thus, our 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. Presumably then, Rogers would
have us adopt a more nebulous cause-in-fact standard here, one untethered from but-for causation.
But we have previously described a cause-in-fact definition that omits the but-for component as
“incomplete.” Crump, 330 S.W.3d at 223 (quoting Ford Motor Co. v. Ledesma, 242 S.W.3d 32, 46
(Tex. 2007). After all, “[c]ause in fact is essentially but-for causation.” Ryder Integrated Logistics,
Inc. v. Fayette Cty., 453 S.W.3d 922, 929 (Tex. 2015) (per curiam). And, as one authority has
observed, “[r]equiring the plaintiff to prove cause in fact by the but-for test is almost always the right
approach.” David W. Robertson, The Common Sense of Cause in Fact, 75 TEX . L. REV . 1765, 1776
(1997).
According to Professor Robertson, the term “substantial factor” has come to have a number
of different jurisprudential meanings, most of which provide a poor substitute for but-for causation.
He submits that the test is useful apart from but-for causation in only a limited category of cases
involving concurrent causation. See id. (describing “a limited category of cases in which two causes
concur to bring about an event, and either cause, operating alone, would have brought about the
event absent the other cause”) (internal quotations & citations omitted); see also RESTATEMENT
(SECOND ) OF TORTS § 432(2) (1965) (stating the same rule). Professor Robertson concludes that
“[t]he only ‘combined active conduct’ cases in which the substantial factor test is needed are those
10
in which the defendant’s conduct was by itself sufficient to accomplish the harm but did not seem
to be a but-for cause of the harm because it was fortuitously joined by the causal conduct of another
that was also by itself sufficient to accomplish the harm.” Robertson, supra at 1778. Applying this
rationale, we have, on occasion, applied the substantial-factor test without requiring proof of but-for
causation. See, e.g., Bostic v. Ga.-Pac. Corp., 439 S.W.3d 332, 344–45 (Tex. 2014) (concluding that
plaintiffs in multiple-exposure asbestos cases need not prove but-for causation because “‘application
of the but-for rule would allow each defendant to escape responsibility because the conduct of one
or more others would have been sufficient to produce the same result’”) (quoting W. PAGE KEETON
ET AL., PROSSER AND KEETON ON THE LAW OF TORTS § 41 (5th ed. 1984).
Rogers has variously argued in the court of appeals and in this Court that Zanetti’s drafting
error was the cause in fact of the fraud finding against him in Alexander and the cause in fact of his
lost “investment” in Accent. Neither formulation appears to bring the matter within the narrow
group of cases identified by Professor Robertson because the alleged drafting error is not a
concurrent cause. Before Zanetti’s alleged drafting errors, Rogers had already committed fraud
sufficient to render the agreement unenforceable regardless of its language. Rogers’ malpractice
claim, alleging the negligent failure to join Zanetti and his law firm as responsible third parties,
similarly fails because Rogers’ antecedent fraud supports the liability ultimately imposed and
likewise renders this malpractice allegation causally irrelevant. We accordingly conclude that the
court of appeals did not err in applying our traditional cause-in-fact standard to Rogers’ malpractice
claim.
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B.
Did the failure to designate a damages expert to rebut the Alexanders’ valuation
of Accent cause Rogers’ harm?
At the Alexander trial, Accent’s value bore a close relation to the jury’s calculation of
damages. The jury heard valuation testimony from one witness: Pavi Athickal, the Alexander
plaintiffs’ damages expert. Athickal calculated the value of Accent to be $2,493,611.68 and testified
that the figure represented the proper amount of out-of-pocket damages. Perry did not timely
designate a rebuttal expert before withdrawing from the case, and thus no similar expert was
available to refute Athickal’s testimony at trial. In reaching its verdict, the jury trisected Athickal’s
figure and awarded each of the three Alexander plaintiffs $831,203.89 in out-of-pocket damages.
Rogers claims Perry’s failure to designate an expert to rebut the “grossly inflated valuation of
Accent” was malpractice that caused him to suffer an unreasonably high verdict.
Whether a negligent lawyer’s conduct is the cause in fact of the client’s claimed injury
requires an examination of the hypothetical alternative: What should have happened if the lawyer
had not been negligent? The inquiry does not differ markedly from other tort cases; although, the
suit-within-a-suit analysis can add to its complexity. The lawyers suggest that suit-within-a-suit
causation requires proof that the client would have won the underlying trial absent his lawyer’s
negligence, but that is not always the client’s case. Certainly, when the client alleges that his
lawyer’s negligence caused him to lose his case, we require proof that “but for the attorney’s breach
of duty, [the malpractice plaintiff] would have prevailed on the underlying cause of action and would
12
have been entitled to judgment.” Stanfield, 494 S.W.3d at 96 n.3 (explaining what the suit-within-a-
suit test “usually” requires) (internal quotations & citations omitted).
But malpractice claims do not always depend on ultimate victories. They can also involve
imprudent attorney actions that materially and unfavorably affect the value of the client’s underlying
claim or defense. For example, in one case an excess insurer alleged that attorneys mishandled the
defense, resulting in an unreasonably inflated settlement. Keck, Mahin & Cate v. Nat’l Union Fire
Ins. Co. of Pittsburgh, Pa., 20 S.W.3d 692, 695–96 (Tex. 2000). We said that “[e]ven if [the excess
insurer] can prove that its settlement was excessive, it must also prove that [the defendants]
mishandled the defense and that a judgment for [the underlying plaintiff] in excess of the case’s true
value would have resulted from [the defendants’] malpractice.” Id. at 703 (footnote omitted). And
we defined the case’s “true value” as “the recovery [the underlying plaintiff] would have obtained
following a trial in which [the underlying defendant] had a reasonably competent, malpractice free
defense.” Id. at 703 n.5. In a more recent malpractice case involving an attorney’s settlement
valuation of the client’s underlying case, we stated the measure of damages as “the difference
between the result obtained for the client and the result that would have been obtained with
competent counsel.” Elizondo, 415 S.W.3d at 263.
In every case, the plaintiff must supply a causal link between the attorney’s alleged
negligence and the client’s damages. Any variation in how we articulate the suit-within-a-suit
standard is but a reflection of the plaintiff’s pleadings; different cases involve different injuries and
different causal links. Consequently, to the extent the lawyers argue that we always require a
hypothetical showing of ultimate victory, they are mistaken.
13
Rogers’ allegations here involve valuation of the underlying claim in Alexander and the need
for expert rebuttal testimony. He does not allege that the existence of a rebuttal expert would have
resulted in an award of no damages (an outright trial victory) but rather that a properly designated
expert would have resulted in a smaller award of damages (a trial loss, but a more palatable one).
Rogers’ burden then was to offer some competent evidence that the allegedly inflated verdict was
more likely than not caused by the lack of a rebuttal expert.
Turtur hints at what the causation evidence should look like in this type of case. 146 S.W.3d
at 117. There the plaintiffs alleged that several lawyers caused an adverse verdict by mishandling
litigation in bankruptcy court. Id. at 116–17. Among the claimed acts of malpractice were the
failure to call certain witnesses, the failure to read relevant testimony into the record, and the
assignment of the case to an inexperienced attorney. Id. at 118. These mistakes, the plaintiffs
claimed, led the bankruptcy judge to reach a result the judge would not have otherwise reached had
the lawyers performed competently. Id. We determined the Turtur plaintiffs needed expert
testimony to satisfy the causation requirement. Id. at 120. We imposed that requirement because
“the wisdom and consequences of [those] kind of tactical choices made during litigation are
generally matters beyond the ken of most jurors,” and “when the causal link is beyond the jury’s
common understanding, expert testimony is necessary.” Id. 119–20 (citations omitted).
Similarly, the malpractice claim here implicates the hypothetical effect of evidence on a
decisionmaker, and Rogers does not argue about the need for expert causation testimony. In fact,
he submits that he offered testimony to the trial court from four experts. The lawyers respond that
all of this testimony is either pertinent to elements besides causation, conclusory, or not expert
14
testimony at all. In short, they conclude the summary judgment was proper because no competent
evidence of causation exists. See Leitch v. Hornsby, 935 S.W.2d 114, 119 (Tex. 1996)
(“Incompetent opinion testimony is not evidence, and a finding supported only by such testimony
cannot survive a no evidence challenge.”). The court of appeals agreed and affirmed. ___ S.W.3d
at ____.
We have long held that “conclusory statements made by an expert witness are insufficient
to support summary judgment.” Burrow v. Arce, 997 S.W.2d 229, 235 (Tex. 1999) (quoting
Anderson v. Snider, 808 S.W.2d 54, 55 (Tex. 1991) (per curiam)). In order to be competent
summary-judgment evidence, an expert’s opinion must have a “demonstrable and reasoned basis on
which to evaluate his opinion.” Elizondo, 415 S.W.3d at 265. This basis must come in the form of
an answer to the question “Why”: Why did the expert reach that particular opinion? See Burrow, 997
S.W.2d at 236 (finding that an expert’s basis was missing because “he [did] not explain why the
settlements were fair and reasonable for each of the Clients”).
But not any explanation will suffice. “When an expert's opinion is based on assumed facts
that vary materially from the actual, undisputed facts, the opinion is without probative value and
cannot support a verdict or judgment.” Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497, 499
(Tex. 1995). And “[e]ven when some basis is offered for an opinion, if that basis does not, on its
face, support the opinion, the opinion is still conclusory.” City of San Antonio v. Pollock, 284
S.W.3d 809, 817 (Tex. 2009). With these principles in mind, we—like the court of
appeals—evaluate each expert’s testimony in turn.
15
1. Allen Hahn
In response to the lawyers’ motion for summary judgment, Rogers offered the testimony of
Allen Hahn. Hahn, a retained business-valuation expert, opined that the fair market value of Accent
was $395,000—a substantially smaller figure than Athickal’s valuation of $2,493,611.68.
To avoid summary judgment Rogers needed to show that (1) alternative expert valuation
testimony was available and (2) the testimony would have probably altered the verdict. See Keck,
20 S.W.3d at 703. Hahn’s testimony is some evidence of the former, but not the latter. The latter
is, after all, a purely trial-based question in the ambit of legal experts, and Hahn does not profess to
be such an expert. In fact, Hahn disclaimed any opinion on causation. Hahn’s testimony, though
perhaps a piece of the puzzle, simply does not provide the necessary causal link.
2. Lewis Sifford
Rogers also attached excerpts from the deposition of Lewis Sifford, a litigation expert.
Sifford gave his opinion about various aspects of the lawyers’ conduct leading up to trial. Sifford
testified that failure to designate a rebuttal damages expert can be “a high risk endeavor” but that he
had “seen that done.” He explained further that the lack of a rebuttal expert “gave the jury no
alternatives in reference to damages and apparently the lawyers that tried the case, at least Mr.
Marketos, thought that was a significant contributing factor in the result.”
This testimony, though given by a credentialed expert, again constitutes no evidence of
causation. Sifford’s testimony about the objective riskiness of failing to designate is not probative
of the cause-in-fact requirement. Instead, the risk associated with a trial tactic speaks to what a
16
reasonably prudent lawyer would do under similar circumstances—i.e., the breach-of-duty element2
of a malpractice action. See Cosgrove v. Grimes, 774 S.W.2d 662, 665 (Tex. 1989) (explaining that
a malpractice “instruction to the jury should clearly set out the standard for negligence in terms
which encompass the attorney's reasonableness in choosing one course of action over another”).
Breach and causation are entirely distinct such that ”an abundance of evidence as to one cannot
substitute for a deficiency of evidence as to the other.” Turtur & Assoc.’s, 146 S.W.3d at 119.
Whether or not it was reasonable for Perry to conduct the litigation as he did is immaterial to the
separate question of what a reasonable jury would have done with the competing evidence had Perry
conducted the litigation differently. See id.
The statement from Sifford’s deposition that addresses a causal link—“apparently the lawyers
that tried the case, at least Mr. Marketos, thought that [the failure to designate a rebuttal expert] was
a significant contributing factor in the result”—is likewise insufficient to avoid summary judgment
for two reasons. First, and most fundamentally, relaying the opinion of another witness without
providing any basis for the borrowed conclusion is itself no evidence. See Pollock, 284 S.W.3d at
816 (“Bare, baseless opinions will not support a judgment even if there is no objection to their
admission in evidence.”). Said differently, repeating another’s ipse dixit does not make it any less
of an ipse dixit. And second, the standard for causation here is cause-in-fact, or but-for causation,
not “significant contributing factor.” Ante at ____. Sifford’s testimony is no evidence that the
2
Again, the lawyers did not challenge the breach element in their motion for summary judgment.
17
verdict would have likely been different but for the absence of a competing expert’s testimony.
3. Peter Marketos
Next, Rogers offers the opinion of the Alexander plaintiffs’ trial attorney, Peter Marketos.
When asked whether Perry’s failure to designate a rebuttal expert harmed Rogers, Marketos testified
“I know that it did” and that the failure to designate was “a significant contributing factor to the
jury’s verdict.” Marketos gave the following explanation for his opinion:
Because subsequent to the trial I was contacted by an attorney who was on the jury
. . . and he divulged the entire thought-process that the jury went through, and he told
me that at one point, the foreman had asked, are we awarding too much damages?
And the gentleman . . . had spent a lot of time going through alternative damages that
were significantly lower, but that the jury concluded that they had no competing
evidence with Mr. Athickal's testimony, and so they accepted—ultimately agreed to
accept Mr. Athickal's testimony to the penny.
This relayed juror communication is the sole basis for Marketos’ causation opinion.3 Therefore,
whether Marketos’ opinion is conclusory hinges on the sufficiency of this proffered basis. See
Elizondo, 415 S.W.3d at 265.
As stated above, an expert must explain why he or she reaches a certain conclusion. Burrow,
997 S.W.2d at 236. The requisite why depends, naturally, on the nature of the opinion given. Here,
Marketos opined that Perry’s failure to designate a rebuttal expert caused the sizeable verdict. That
3
The lawyers contend that this juror story is inadmissible double hearsay and that Rogers waived reliance on
the story because he did not quote specifically the relevant excerpt in his summary-judgment response. Rogers responds
that any hearsay objection was waived because the lawyers failed to object to the testimony during summary-judgment
proceedings and that Rogers sufficiently called the trial court’s attention to the juror story by citing (albeit not by
quoting) the relevant portion of the attached deposition. Because we conclude the juror story is an insufficient basis for
Marketos’ causation opinion we need not reach these matters. Nor do we address whether a juror’s testimony about his
or her mental processes could ever be competent evidence in a subsequent malpractice case.
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sounds simple enough. But the causal chain—and thus the necessary corroboration—requires more
than that.
The proximate-cause element of a legal-malpractice case requires proof of a cause in fact:
proof that, but for the attorney’s alleged mistake, the claimed harm would not have occurred. See
Akin, Gump, Strauss, Hauer & Feld, 299 S.W.3d at 122. As a matter of necessity, every trial-
malpractice action therefore involves a comparison of two cases—the case containing imprudent
attorney conduct and the case the plaintiff claims should have unfolded with competent
representation. Stanfield, 494 S.W.3d at 96 n.3 (referring to this exercise as the suit-within-a-suit
requirement). The first case actually occurred, and its result is beyond question. The other case is,
of course, a hypothetical one with a hypothetical result. Gunn v. Minton, 133 S. Ct. 1059, 1067
(2013) (recognizing the hypothetical nature of a legal-malpractice claim). Crucial to Rogers’
complaint, when the alleged mistake involves omitted evidence, the hypothetical, mistake-free case
must necessarily be one that includes the relevant evidence. See David A. Fischer, Causation in Fact
in Omission Cases, 1992 UTAH L. REV . 1335, 1341 (1992) (explaining that proof of cause in fact in
“[o]mission cases require[s] an additional inquiry by hypothesizing the occurrence of a fictitious
act”). And as a consequence, evidence of causation must show that the result in the hypothetical case
would, more likely than not, be different than the result in the actually litigated case because of the
additional evidence.
Taking the foregoing into consideration, Marketos’ opinion must be that a trial containing
a hypothetical rebuttal expert would have resulted in a lesser verdict than the one the Alexander jury
returned. And for Marketos’ opinion to be competent evidence, his basis must explain why that
19
disparity would exist. Elizondo, 415 S.W.3d at 265. Assuming without deciding that the
secondhand juror testimony is competent evidence, the juror’s story provides some insight. The
testimony explains that the juror and the jury foreman (two of twelve4) had questions about
Athickal’s valuation, were concerned that they might be awarding “too much damages,” explored
alternative, lower figures, and recognized the absence of any other testimony in reaching their
verdict. This commentary no doubt informs Marketos’ opinion with respect to the mental processes
of several jurors in reaching the Alexander verdict.
But, as outlined above, an adequate basis for a causation opinion in this case requires a
comparison—a consideration of the Alexander result on the one hand and the hypothetical clash of
experts on the other. A juror’s (eventually abandoned) reservations about testimony in the actual
case is no support for an opinion that a reasonable jury would have credited the testimony of a
competing expert (like Hahn) had it been given the chance. Marketos’ unnamed juror did not specify
what the jury would have done had Perry designated someone like Hahn. And though the juror
expressed a desire to have the opportunity to consider competing testimony, he made no credibility
comparison between Athickal and any given rebuttal expert. Nor could he; the Alexander jury never
heard nor considered testimony from any such expert. Absent a comparison between the real and
the hypothetical, Marketos is left to speculate on causation.
4
There is inherent difficulty with using the testimony of a single juror to speak for all twelve. A former justice
and chief justice of this Court has written on the subject. See Jack Pope, The Mental Operations of Jurors, 40 T EX . L.
R EV . 849, 853 (1962). Justice Pope remarked that the practice of relying on a single juror’s testimony “gives to the
secret thought of one the power to disturb the expressed conclusions of twelve”—a disconcerting possibility to say the
least. Id. (citing Perry v. Bailey, 12 Kan. 539, 545 (1874)).
20
Ultimately, “[e]ven when some basis is offered for an opinion, if that basis does not, on its
face, support the opinion, the opinion is still conclusory.” Pollock, 284 S.W.3d at 817. This is such
a case. Marketos’ juror story, while peeking inside the jury room and highlighting a juror’s
subjective considerations, provides no predictive aspect to Marketos’ opinion and no basis to
evaluate the relative probabilities at play. Marketos’ opinion is thus conclusory and incompetent
summary-judgment evidence. Leitch, 935 S.W.2d at 119.
4. Christopher Kalis
Finally, Rogers relies on the affidavit of Christopher Kalis, one of the defense lawyers who
represented Burmeister in the Alexander trial.5 Kalis’s affidavit states, in relevant part, that,
It is my opinion that the applicable standard of care . . . required the designation of
a qualified expert on damages . . . who could truthfully opine that [the Alexander]
Plaintiffs[’] damage claims in that cause were overly aggressive, unreasonable, and
bore no reasonable relationship to the facts of that case. It is my understanding that
the damage expert designated in this case has opined that the entire value of the
company at issue in Cause No. 03-07498, at the time in issue therein, was
$395,000.00.
...
Based on the recited factors, it is my professional opinion that the jury awarded an
amount of damages that were not supported by the evidence, but which could not be
controverted by the Defendants because Mr. Perry failed to designate a competent
expert to controvert Plaintiffs[’] damage evidence, upon which the jury could
consider in reaching its verdict in that cause.
...
It is my professional opinion, as based on all the above-described factors, and my
representation of Mr. Burmeister at the trial of Cause No. 03-04798 that Mr. Perry's
5
The trial court struck Kalis’ affidavit after the lawyers objected, and we assume, without deciding, that the trial
court erred in this regard.
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breach of the above-described standard of care owed to Mr. Burmeister was the
proximate cause of the jury’s verdict, including the huge damages found to be due
from Defendants in that action, and the ensuing judgment against Mr. Burmeister and
Mr. Rogers.
Kalis’ affidavit contains several clear, unequivocal statements of the necessary causation opinion:
“the proximate cause of the enormous verdict and the ensuing judgment was Mr. Perry's failure to
designate a controverting damages expert.” But does the affidavit supply an adequate basis? Kalis
provides some explication in support of his conclusion. He says that his opinion is based on (1) his
“representation of Mr. Burmeister at the [Alexander] trial” and (2) “all of the above-described
factors.” Yet, ultimately, Kalis’ explanation does not remove his causation opinion from the realm
of conclusory expert testimony.
First, Kalis’ service as a defense attorney in the underlying trial is an insufficient basis for
his legal conclusion. Without question, Kalis’ trial experience makes him familiar with the
circumstances of the Alexander trial. His experience might even make him more credible than most
to speak about this particular case. But the assurance of familiarity and credibility is not a
“demonstrable and reasoned basis” upon which to evaluate Kalis’ opinion. Elizondo, 415 S.W.3d
at 265. An ipse dixit is still an ipse dixit even if offered by the most trustworthy of sources. See id.
at 264 (explaining that an expert’s opinion is conclusory if he or she “simply say[s], ‘Take my word
for it, I know’”).
An expert’s familiarity with the facts is not alone a satisfactory basis for his or her opinion.
For example, in Anderson v. Snider, a legal-malpractice defendant attached his own affidavit to a
motion for traditional summary judgment. 808 S.W.2d 54, 54 (Tex. 1991) (per curiam). The
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lawyer’s affidavit included a prefatory statement that the affiant had “reviewed the Plaintiff’s
Original Petition, [the affiant’s] file and the relevant and material documents filed with the Court.”
Id. Despite the affiant’s familiarity with the case, we found the opinion conclusory. See id. at 55.
The affiant simply did not provide “the legal basis or reasoning for [his] opinion,” and thus his
affidavit was incompetent summary-judgment evidence. Id. We said the same in Burrow under
similar circumstances. See 997 S.W.2d at 235 (holding that an expert’s opinion lacked an adequate
basis even though the affidavit recited the expert’s familiarity with the case). Like the experts in
those cases, Kalis’ familiarity with the Alexander trial fails to serve as an adequate basis for his
causation opinion.
Nor do Kalis’ other relied-upon “factors” render his opinion competent evidence. In relevant
part, Kalis explained that Athickal’s valuation was overly aggressive, unreasonable, and bore no
reasonable relationship to the facts of that case,” and the jury awarded an amount of damages that
were not supported by the evidence, but which could not be controverted by the Defendants because
Mr. Perry failed to designate a competent expert to controvert Plaintiffs[’] damage evidence.”
However, not all explanations are satisfactory. For example, “[w]hen an expert's opinion is based
on assumed facts that vary materially from the actual, undisputed facts, the opinion is without
probative value and cannot support a verdict or judgment.” Burroughs Wellcome, 907 S.W.2d at
499.
In part, Kalis’ opinion falls victim to this deficiency. He first explained that “the jury
awarded an amount of damages that were not supported by the evidence.” In other words, Kalis
opines that the Alexander jury awarded damages based on legally insufficient evidence. Yet this
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basis is irrefutably false. Kalis served as appellate counsel following the Alexander trial;
consequently, he is well aware of the court of appeals’ holding that legally sufficient evidence
existed to support the jury’s verdict. See Alexander, 244 S.W.3d at 388 (“[S]ufficient evidence
supported the jury’s award of damages for Rogers’ and Burmeister’s fraud, and Athickal presented
competent testimony concerning the amount of damages.”). Put differently, the Alexander jury was,
as a matter of law, reasonable in awarding the damages they awarded based on the testimony they
heard. See id. This basis for Kalis’ opinion is thus in fatal tension with that undisputed fact and
cannot support a competent opinion. See Burroughs Wellcome, 907 S.W.2d at 499.
The remainder of Kalis’ explanation—that Athickal’s testimony could not be controverted
by the Defendants because Mr. Perry failed to designate a competent expert to controvert Plaintiffs[’]
damage evidence”—fails in the same manner as Marketos’ proffered explanation. A losing client
can often point to omitted, controverting evidence that the jury could have considered. But such an
omission is only causative of a client’s damages when the controverting evidence, had it been
presented, would have probably changed the result. Kalis’ explanation, like Marketos’ juror story,
contains no predictive factual basis about what a reasonable jury would do with competing evidence
and is therefore insufficient to support a competent opinion. Neither Kalis nor Marketos make the
necessary connection.
In summary, because Rogers needed competent expert testimony on causation to withstand
summary judgment, and because he offered none, we conclude that the court of appeals did not err
in affirming the trial court’s summary judgment with respect to Perry’s failure to designate a rebuttal
expert.
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C.
Did the failure to communicate a settlement offer in the Alexander litigation
cause Rogers’ harm?
Accent’s founders offered to settle the Alexander litigation and transfer full ownership of the
business to Rogers for $450,000. The summary-judgment record includes the affidavit of the
Alexanders’ attorney who averred that he sent this settlement demand soon after filing suit but got
no response. The Alexanders’ attorney further stated that the demand was a “starting point,” but he
could not recall how much less he was authorized to accept. Rogers avers that he was never advised
of the settlement offer. His affidavit provides further, “Had I known that I could have settled the
case with the Alexanders and Pucci and received control of Accent for $450,000, I would have
instructed my attorneys to negotiate the best possible resolution and release without incurring the
time or expense of litigation.”
Rogers argues here that, had he known of the offer, he might have settled the case and
avoided the adverse judgment in Alexander. He contends further that evidence of the offer’s
existence and his willingness to explore settlement was sufficient to raise a fact issue and defeat the
summary judgment rendered below.
The lawyers assume for the sake of argument that Rogers was not advised of the settlement
offer and that they thereby breached their duty of care. Even so, they submit, the summary-judgment
evidence fails to raise a fact issue as to causation because no evidence exists that the case would have
settled on those terms or any others.
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The court of appeals agreed, noting that “Rogers testified only that he would have tried to
settle the case had he known about the settlement offer.” ___ S.W.3d at ___. The court noted
further the absence of any evidence that Rogers could have paid either the $450,000 actually
demanded or any lesser sum that the Alexanders would have accepted. Id. We agree that Rogers’
evidence about the settlement offer fails to raise a genuine issue of material fact on causation. The
summary-judgment record contains no evidence that Rogers would have settled the Alexander case
for $450,000.
III. Conclusion
“Legal malpractice litigation is a land of second chances.” 4 MALLEN § 37:1 at 1446. But
that second chance is typically measured by comparing what actually happened in prior litigation
with a hypothetical alternative of what should have happened. Whether a negligent lawyer’s conduct
is the cause in fact of the client’s claimed injury requires an examination of the hypothetical
alternative: What should have happened if the lawyer had not been negligent? Texas follows the
“accepted and traditional means of resolving the[se] issues” by typically employing the case-within-
a-case or suit-within-a-suit analysis. 4 MALLEN § 37:87 at 1695; see also State Farm Fire & Cas.
Co. v. Gandy, 925 S.W.2d 696, 708 (Tex. 1996) (“a legal malpractice case requires a ‘suit within a
suit’”) (quoting Zuniga v. Groce, Locke & Hebdon, 878 S.W.2d 313, 318 (Tex. App.—San Antonio
1994, writ ref’d); Green, 376 S.W.3d at 897 (referencing the “causation aspect of the plaintiff’s
burden as the ‘suit-within-a-suit’ requirement”).
The plaintiff has the burden of presenting evidence that establishes with reasonable
probability that cause in fact exists. Jelinek v. Casas, 328 S.W.3d 526, 533 (Tex. 2010) (“meaning
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simply that it is more likely than not”) (internal quotations omitted). A plaintiff need not prove
causation with absolute certainty, but the evidence must establish causation beyond mere possibility
or speculation. HMC Hotel Props., 439 S.W.3d at 913. When the merits of the underlying case are
relevant to the claimed injury, the suit-within-a-suit requirement avoids speculation about the
hypothetical alternative and provides a structure for re-creating the underlying case. But when the
legal-malpractice claim does not implicate the merits of the underlying case, the suit-within-a-suit
comparison is unnecessary. See, e.g., Elizondo, 415 S.W.3d at 270 (noting that “a ‘suit within a suit”
analysis is not required in a [settlement] case like this one”). The causation test under either
scenario, however, is but-for causation, and the court of appeals therefore did not err in applying that
standard to Rogers’ malpractice allegations. Moreover, the court did not err in affirming the
summary judgment because Rogers’ summary-judgment evidence fails to raise a material fact issue
as to the causation element of Rogers’ negligence claims.
The court of appeals’ judgment is accordingly affirmed.
_____________________________
John P. Devine
Justice
Opinion Delivered: April 28, 2017
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