Scott Richter and Jeanne Richter v. Bruce J. Mery ( 2010 )

MEMORANDUM OPINION
No. 04-10-00098-CV
Scott RICHTER and Jeanne Richter,
Appellants
v.
Bruce J. MERY,
Appellee
From the 198th Judicial District Court, Kerr County, Texas
Trial Court No. 09-207-B
The Honorable M. Rex Emerson, Judge Presiding
Opinion by: Phylis J. Speedlin, Justice
Sitting: Karen Angelini, Justice
Phylis J. Speedlin, Justice
Rebecca Simmons, Justice
Delivered and Filed: September 29, 2010
AFFIRMED
Scott Richter and Jeanne Richter (“the Richters”) challenge the trial court’s order
granting summary judgment in favor of their former attorney, Bruce J. Mery, in the Richters’
legal malpractice suit against Mery. In a single issue, the Richters argue that the doctrine of res
judicata and the compulsory counterclaim rule do not bar their claims for legal malpractice
against Mery. We affirm the judgment of the trial court.
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BACKGROUND
The Richters hired Mery to represent them in a lawsuit against their homebuilder. Over
two years after filing suit, the parties reached a settlement agreement; the Richters, however,
refused to sign the final release agreement. Mery subsequently filed a motion to withdraw as
counsel, and then filed a plea in intervention in the underlying civil action, asserting his right to
recover his attorney’s fees, as well as related expenses. The Richters subsequently retained new
counsel, and at a hearing held on July 24, 2008, the trial court expressed its concern regarding
the plea in intervention filed by Mery. The court stated that it would be “cleaner” if a motion to
sever were filed. On August 14, 2008, a hearing was held to memorialize a new settlement
agreement in the homebuilder suit. At the hearing, counsel for the Richters represented to the
trial court that the Richters had resolved the plea in intervention with Mery. The trial court
entered an “Agreed Order of Dismissal with Prejudice As to Plea in Intervention.” No motion to
sever was filed by the parties.
Thereafter, the Richters sued Mery, alleging causes of action for legal malpractice,
breach of fiduciary duties, breach of contract, and violations of the Deceptive Trade Practices
Act. Mery moved for summary judgment, arguing that the Richters’ claims were compulsory
counterclaims to his plea in intervention filed in the homebuilder suit, and that because an agreed
order of dismissal with prejudice as to Mery’s plea in intervention was entered, the Richters’
claims were barred by res judicata. The Richters responded to the motion for summary
judgment, arguing their claims were not barred because (1) Mery’s plea in intervention sought
indemnification of expenses under a contingent contract, most of which had not accrued or
matured at the time the intervention was filed; and (2) the plea in intervention was severed from
the homebuilder suit by way of the dismissal with prejudice as to Mery’s plea in intervention.
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The trial court granted Mery’s motion for summary judgment without specifying the grounds for
its decision.
DISCUSSION
On appeal, the Richters contend the trial court erred in granting Mery’s motion for
summary judgment because their claims are not barred by res judicata for the following reasons:
(1) they agreed with Mery to separate the plea in intervention so the homebuilder case could be
finalized without releasing the parties’ complaints against each other; (2) the agreed order of
dismissal with prejudice as to Mery’s plea in intervention was “clear, or at wors[t] ambiguous,
and its meaning can be explained by extrinsic evidence”; and (3) the plea in intervention sought
indemnification for expenses allegedly incurred in the homebuilder suit, but that had not yet
accrued at the time Mery filed his intervention.
A. Standard of Review and Applicable Law
We review the trial court’s granting of a summary judgment de novo. Reynosa v. Huff,
21 S.W.3d 510, 512 (Tex. App.—San Antonio 2000, no pet.). To be entitled to summary
judgment on the affirmative defense of res judicata, the movant must establish (1) a prior final
judgment on the merits by a court of competent jurisdiction, (2) the same parties or those in
privity with them, and (3) a second action based on the same claims as were or could have been
raised in the first action. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010); TEX.
R. CIV. P. 94 (identifying res judicata as an affirmative defense). The doctrine of res judicata
bars the relitigation of claims that have been finally adjudicated or that could have been litigated
in the prior action. See Igal v. Brightstar Info. Tech. Group, Inc., 250 S.W.3d 78, 86 (Tex.
2008). The Texas Supreme Court uses a transactional approach to res judicata; that is, the
factual matters comprise the subject matter of the litigation and determine “the gist of the
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complaint.” Pustejovsky v. Rapid-Am. Corp., 35 S.W.3d 643, 651 (Tex. 2000). Subsequent
litigation cannot be based on claims that arise from those facts. See id.
According to Rule 97(a) of the Texas Rules of Civil Procedure, a counterclaim is
compulsory if: 1) it arises out of the transaction or occurrence that gives rise to the opposing
party’s claim; 2) it is mature and owned by the counter-claimant; 3) it is against an opposing
party in the same capacity; 4) it does not require third parties who cannot be brought into the
suit; 5) it is within the court’s jurisdiction; and 6) it is not pending elsewhere. TEX. R. CIV. P.
97(a); Ingersoll-Rand Co. v. Valero Energy Corp., 997 S.W.2d 203, 207 (Tex. 1999). Texas
courts have held that a claim of attorney malpractice is a compulsory counterclaim to a claim for
attorney’s fees under Rule 97(a). TEX. R. CIV. P. 97(a); Goggin v. Grimes, 969 S.W.2d 135, 138
(Tex. App.—Houston [14th Dist.] 1998, no pet.); CLS Assoc., Ltd. v. A___ B___, 762 S.W.2d
221, 224 (Tex. App.—Dallas 1988, no writ). When a legal malpractice claim is not asserted as a
counterclaim, it is barred in a subsequent legal action by res judicata. CLS Assoc., 762 S.W.2d at
223–24.
B. Analysis
The Richters acknowledge that generally a legal malpractice claim must be brought as a
counterclaim in a suit to recover attorney’s fees when both claims arise out of the same services
rendered by an attorney for a client. See TEX. R. CIV. P. 97(a). They contend, however, that the
general rule is inapplicable to the current situation for three reasons. First, the Richters argue
that their legal malpractice claim is not barred by res judicata because they agreed with Mery to
separate the plea in intervention from the homebuilder suit so that the settlement of the
homebuilder suit could be finalized. As evidence of this “agreed severance,” they point to the
affidavit of their lawyer, Gregory Delk, as well as to Scott Richter’s affidavit, both of which state
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that the “Agreed Order of Dismissal with Prejudice As to Plea in Intervention” was intended to
prevent Mery from refiling his plea in intervention in the homebuilder suit and was not intended
to settle any disputes between the Richters and Mery. Delk further states that at the August 2008
hearing, he advised the trial court that the order did not resolve, or constitute a release of, the
claims between the Richters and Mery. Second, the Richters contend that the clear language of
the dismissal order 1 conveys the parties’ intention to forever preclude Mery from refiling his
intervention in the homebuilder suit as an intervenor in that suit only. Alternatively, they argue
that the wording of the order is ambiguous, and that the parol evidence rule allows the use of
extrinsic evidence to establish the parties’ intent, thereby precluding summary judgment.
These arguments appear to be a collateral attack on the judgment at issue. Only a void
judgment may be collaterally attacked. Browning v. Prostok, 165 S.W.3d 336, 346 (Tex. 2005).
We do not look beyond the face of the judgment in a situation such as this where no
jurisdictional defect affirmatively appears on the face of the judgment. See Cobb v. Pratt, 593
S.W.2d 351, 353 (Tex. Civ. App.—Houston [14th Dist.] 1979, writ ref’d n.r.e.). Because it is
apparent from looking at the judgment that the plea in intervention was dismissed, we may not
look to evidence outside the judgment itself to determine the issues resolved by the prior lawsuit.
See Collins v. Guinn, 102 S.W.3d 825, 831–32 (Tex. App.—Texarkana 2003, pet. denied).
Further, a dismissal order dismissing a case with prejudice functions as final adjudication on the
merits and operates as if the case had been fully tried and decided. See Ritchey v. Vasquez, 986
S.W.2d 611, 612 (Tex. 1999) (per curiam); Mossler v. Shields, 818 S.W.2d 752, 754 (Tex. 1991)
(per curiam) (noting that a dismissal with prejudice is a ruling on the merits). Therefore, we
1
The “Agreed Order of Dismissal with Prejudice As to Plea in Intervention” states, in relevant part, as follows:
. . . IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED, that the Plea Of
Intervention in the above-entitled and numbered cause be and the same is dismissed with prejudice
to the right of BRUCE MERY, Intervenor to refile same or any part thereof against SCOTT
RICHTER and JEANNE RICHTER, Respondents. . . .
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conclude the agreed order of dismissal as to Mery’s plea in intervention was a final judgment for
purposes of settling the intervention, and also constitutes a final judgment for purposes of res
judicata. The Richters’ first two issues are overruled.
Finally, the Richters aver that their malpractice claim is not a compulsory counterclaim
because Mery’s plea in intervention sought “indemnification” for attorney’s fees and expenses;
they contend that most of these expenses had not accrued at the time the intervention was filed,
and therefore the claim was not mature at the time of the homebuilder suit’s disposition. We
disagree that the Richters’ malpractice claim was exempt from the compulsory counterclaim rule
on this basis. Mery’s plea in intervention requested a specific amount of expenses, which were
liquidated, and thus mature, at the time the intervention was filed. Further, Mery did not seek
“indemnification” for expenses, as the Richters allege. Neither Mery’s fee contract with the
Richters nor his plea in intervention uses language suggesting an indemnification. Thus, on this
record, we cannot conclude that the Richters’ malpractice claim is exempt from the compulsory
counterclaim rule. We overrule the Richters’ third issue on appeal.
CONCLUSION
We conclude that Mery proved his entitlement to judgment as a matter of law on the basis
of the affirmative defense of res judicata by establishing that the Richters failed to bring
their legal malpractice claim as a compulsory counterclaim in the plea in intervention
seeking attorney’s fees. Additionally, the Richters failed to present to the trial court any fact
issues precluding summary judgment in Mery’s favor on the affirmative defense of res judicata.
Accordingly, we affirm the judgment of the trial court.
Phylis J. Speedlin, Justice
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