Billy Fitts and Freida Fitts v. Melissa Richards-Smith, the Law Firm of Gillam & Smith, LLP, E. Todd Tracy, and the Tracy Law Firm

ACCEPTED
06-15-00017-CV
SIXTH COURT OF APPEALS
TEXARKANA, TEXAS
8/7/2015 12:40:12 PM
DEBBIE AUTREY
CLERK
NO. 06-15-00017-CV
IN THE FILED IN
6th COURT OF APPEALS
SIXTH DISTRICT OF TEXAS COURT OF APPEALS
TEXARKANA, TEXAS
AT TEXARKANA 8/7/2015 12:40:12 PM
DEBBIE AUTREY
BILLY FITTS and FREIDA FITTS, Clerk
Appellants,
v.
MELISSA RICHARDS-SMITH, THE LAW FIRM OF GILLIAM & SMITH, LLP,
E. TODD TRACY and THE TRACY LAW FIRM,
Appellees.
On Appeal from the 71st District Court of Harrison County, Texas,
Cause No. 14-0150, The Honorable Brad Morin, Presiding
APPELLEES’ BRIEF OF E. TODD TRACY AND THE TRACY FIRM
RESPECTFULLY SUBMITTED,
/s/ Bruce A. Campbell
/S/ Lindsay McNutt
BRUCE A. CAMPBELL
TEXAS BAR NO. 03694500
LINDSAY MCNUTT
TEXAS BAR NO. 24058823
CAMPBELL & ASSOCIATES LAW FIRM, P.C.
4201 Spring Valley Rd., Suite 1250
Dallas, Texas 75244
Telephone: (972) 277-8585
Facsimile: (972) 277-8586
Email: bcampell@cllegal.com
Email: lmcnutt@cllegal.com
ATTORNEYS FOR APPELLEES
E. TODD TRACY AND THE TRACY FIRM
TABLE OF CONTENTS
Index of Authorities……………………………………………………………....iv
Statement on Oral Argument……………………………………………………vi
Statement on Citations to the Clerk’s Record………………………………….vi
Statement of Facts………………………………………………………………...1
Summary of the Argument…………………………………………………..…...8
Argument…………………………………………………………………………..9
I. Summary Judgment Should Be Affirmed Based on Appellants’
Failure to Adequately Brief the Issues……………………………..9
A. Appellants Waived their Complaints by Failing to Adequately
Brief the Issues on Appeal………………………………………...9
B. Summary Judgment Must be Affirmed Based on Appellants’
Failure to Challenge a Ground Upon Which the Trial Court
Granted Summary Judgment……………………………………..10
II. REPLY TO ISSUE 1: Summary Judgment was Proper because
the Kemper Release—Which Appellants signed behind their
counsel’s back and without their knowledge—extinguished
Appellants’ ability to recover anything from George Fitts’
umbrella policy with RLI………………………………………….14
A. Contrary to Appellants’ argument, the unambiguous release
of all claims against George Fitts released both of George
Fitts’ insurers, Kemper and RLI………………………................18
B. Appellants Argument, raised for the First Time on Appeal,
that the Trial Court Should Not Have Granted Summary
Judgment so Appellants Could Assert Claims against
Non-party Kemper, is not only Nonsensical but Has Been
Waived………….. ………………………………………………22
Appellees’ Brief of E. Todd Tracy and The Tracy Firm ii
C. Contrary to Appellants’ Argument, it was Undisputed
There was No Conflict of Interest………………………………..22
III. REPLY TO ISSUE 2: The Trial Court Properly Granted
Summary Judgment because the Kemper Release negated
the Causation Element of Appellants’ Legal Malpractice
Claim……………………………………………………………..…27
IV. REPLY TO ISSUES 3 AND 4: The Trial Court Properly
Granted Summary Judgment because the Kemper Release
negated the Damages/Injury Element of Appellants’ Legal
Malpractice and Breach of Fiduciary Duty Claims……………...34
Prayer…………………………………………………………………………….36
Certificate of Compliance……………………………………………………….38
Certificate of Service…………………………………………………………….39
Appellees’ Brief of E. Todd Tracy and The Tracy Firm iii
INDEX OF AUTHORITIES
CASES Page
Angus Chemical Co. v. IMC Fertilizer, Inc., 939 S.W.2d 138 (Tex. 1997)………17
American Nat. Fire Ins. Co. v. Hammer Trucking, Inc., 2006 WL 3247906
(Tex.App.—Fort Worth 2006, pet. denied)(mem.op.)………… ….10-11, 21
Barker v. Roelke, 105 S.W.3d 75 (Tex.App.—Eastland 2003, pet. denied)….18, 19
Baty v. Protech Insurance Agency, 63 S.W.3d 841 (Tex.App.—Houston
[14th Dist.] 2002, no. pet.)……………………………………………..16, 20
Bergthold v. Winstead Sechrest & Minick, P.C., 2009 WL 226026
(Tex.App.—Fort Worth 2008, no pet.)…………………………………25-26
Brown v. Holman, 335 S.W.3d 792 (Tex.App.—Amarillo 2011, no pet.)……30, 31
Carr v. Brasher, 776 S.W.2d 567 (Tex.1989)…………………………………….10
Cosgrove v. Grimes, 774 S.W.2d 662 (Tex. 1989)……………………….25, 27, 34
David J. Sacks, P.C. v. Haden, 266 S.W.3d 447 (Tex. 2008)…………………….14
Deer Creek Ltd. v. N. Am. Mortg. Co., 792 S.W.2d 198
(Tex.App.—Dallas 1990, no writ)…………………………………………15
Dresser Industries, Inc. v. Page Petroleum, Inc., 853 S.W.2d 505
(Tex. 1993)....................................................................................................14
Duncan v. Cessna Aircraft Co., 665 S.W.2d 414 (Tex. 1984)………………..15, 16
Emscor Mfg., Inc. v. Alliance Ins. Group, 879 S.W.2d 894 (Tex. App.—
Houston [14th Dist.] 1994, writ denied)…………………………………...11
Grain Dealers Mut. Ins. Co. v. McKee, 943 S.W.2d 455 (Tex.1997)…………….13
Haygood v. Hawkeye Ins. Services, Inc., 2012 WL 1883811
(Tex.App.—Tyler 2012, no pet.) (mem.op.)……………………………….12
Hamlin v. Gutermuth, 909 S.W.2d 114 (Tex.Civ.App. [14th Dist.]
Houston, 1995)…………………………………………………......28, 29, 33
In re ADA, 287 S.W.3d 382 (Tex.App.—Texarkana
2009, no pet.)………………………………………………..9, 21, 22, 33, 34
J.E.M. v. Fid. & Cas. Co. of New York, 928 S.W.2d 668 (Tex. App.—
Houston [1st Dist.] 1996, no writ)………………………………………….13
Judwin Props., Inc. v. Griggs & Harrison, P.C., 981 S.W.2d 868
(Tex.App.—Houston [1st Dist.] 1998, pet. denied per curiam,
11 S.W.3d 188 (Tex. 2000)………………………………………………...25
Keck, Mahin & Cate v. Nat’l Union Fire Co., 20 S.W.3d 692 (Tex.2000)……….16
Kuemmel v. Vradenburg, 239 S.W.2d 869 (Tex. 1951)………………………32, 33
Lowe v. Safeco Ins. Co., 2003 WL 21731306 (Tex. App.—
Dallas 2003, pet. denied)…………………………………………………...17
Appellees’ Brief of E. Todd Tracy and The Tracy Firm iv
Mid-Continent Casualty Co. v. Castagna, 410 S.W.3d 445
(Tex.App.—Dallas 2013, no pet.)………………………………………….12
Morris v. Allstate, 523 S.W. 299 (Tex. Civ. App.-Texarkana 1975, no writ)…….17
Ohio Cas. Ins. Co. v. Time Warner Entertainment Co., L.P., 244 S.W.3d 885
(Tex.App.—Dallas 2008, pet. denied)……………………………………..12
Peeler v. Hughes & Luce, 909 S.W.2d 494 (Tex. 1995)………………………27-28
Pool v. Durish, 848 S.W.2d 722 (Tex.App.—Austin 1992, writ denied)………..17
Rodgers v. Weatherspoon, 141 S.W.3d 342 (Tex.App.—Dallas 2004, no pet.)….29
Schomburg v. TRW Vehicle Safety Systems, Inc., 242 S.W.3d 911(Tex.
App.—Dallas 2008, no pet.)………………………………..14, 15, 16, 17, 19
Star-Telegram, Inc. v. Doe, 915 S.W.2d 471 (Tex. 1995)……………………10, 14
Texas Gas Exploration Corp. v. Fluor Corp., 828 S.W.2d 28
(Tex. App.—Texarkana 1991, writ denied)………………………………..13
Union Indem Ins. Co. of New York v. Certain Underwriters at Lloyd's,
614 F. Supp. 1015 (S.D. Tex. 1985)………………………………………..11
Universal C.I.T. Credit Corp. v. Daniel, 243 S.W.2d 154 (1951)………………..14
Victoria Bank & Trust Co. v. Brady, 811 S.W.2d 931 (Tex. 1991)………………16
Weaver v. Sw. Nat’l Bank, 813 S.W.2d 481 (Tex. 1991)(per curiam)……………..9
STATUTES
Tex. Civ. Prac. & Rem. Code § 16.003……………………………………….24, 28
RULES
Tex. R. App. P. 33.1(a)……………………………………………………..9-10, 22
Tex. R. App. P. 38.1 (i)…………………………………………….9, 21, 22, 33, 34
OTHER AUTHORITIES
Texas Ethics Op. 624 (Tex. Prof. Eth. Comm. 2013), 2013 WL 1776543….……25
Appellees’ Brief of E. Todd Tracy and The Tracy Firm v
STATEMENT ON ORAL ARGUMENT
Pursuant to Texas Rule of Appellate Procedure 39.1, Appellees E. Todd
Tracy and The Tracy Firm (hereafter collectively referred to as the “Tracy
Appellees”) note that oral argument is unnecessary because the briefing adequately
presents the facts and legal arguments to the Court, and the dispositive issues have
been decided and can be issued in a memorandum opinion. Oral argument is also
unnecessary because the summary judgment being appealed was decided by the
trial court by written submission, and all issues and complaints must be contained
in the clerk’s record.
However, if the Court were to grant oral argument, the Tracy Appellees
assert their right to argue in oral argument pursuant to Texas Rule of Appellate
Procedure 39.7.
STATEMENT ON CITATIONS TO THE CLERK’S RECORD
The clerk’s record was filed with this Court on April 8, 2015 and is
referenced in this brief as (CR). The second supplemental clerk’s record was filed
with this Court on April 22 and is referenced in this brief as (CR 2d Supp.). The
fourth supplemental clerk’s record was filed with this Court on June 17 at 4:05:10
p.m. and is referenced in this brief as (CR 4th Supp.). The sixth supplemental
clerk’s record was filed with this Court on August 6 and is referenced in this brief
as (CR 6th Supp.).
Appellees’ Brief of E. Todd Tracy and The Tracy Firm vi
STATEMENT OF FACTS
On November 6, 2009, Appellant Billy Fitts was travelling with his brothers,
William and George Fitts, in George’s 2007 Lexus. (CR 4th Supp. 5). The Lexus
struck a pickup truck that had stopped to make a left turn, killing George and
injuring Billy and William. (CR 4th Supp. 5).
George Fitts had a primary automobile insurance policy with Kemper that
had per person bodily injury limits of $250,000. (CR 2d Supp. 14; CR 4th Supp.
5). George Fitts also had an umbrella policy with RLI with a limit of $5 million.
(CR 2d Supp. 51; CR 4th Supp. 5).1
Appellant Freida Fitts and her employer, Red River Member Insurance, were
the agents of record for both policies. (CR 4th Supp. 5). Mrs. Fitts did not read
either policy. CR 4th Supp. 5). However, Mrs. Fitts did review the declarations
pages from both policies to make sure they showed the correct coverage limits.
(CR 4th Supp. 5-6).
1
In the Underlying Lawsuit, the umbrella policy provided George and Mary Fitts
with an additional $5 million to cover any amount that George and Mary became
legally liable to pay because of the automobile accident. (CR 2d Supp. 71). RLI’s
$5 million coverage became available only after two conditions were met. (CR 6th
Supp. 10-11). First, the value of the claim had to exceed the limits of Kemper’s
policy. (CR 6th Supp. 10-11). Second, George and Mary Fitts had to remain
legally liable for the event that caused the claim. (CR 6th Supp. 10-12). Plaintiffs’
undisclosed actions eliminated George and Mary Fitts’ legal liability for the
accident and terminated RLI’s obligation to cover Plaintiffs’ claim. (CR 6th Supp.
10-12).
Appellees Brief of E. Todd Tracy and The Tracy Firm 1
Almost immediately after the accident and before hiring the Tracy
Appellees, Appellants opened a claim with Kemper. (CR 2d Supp. 86-90; CR 4th
Supp. 6). By December 4, 2009, Appellants began sending Kemper medical
invoices for reimbursement. (CR 2d Supp. 103-109). On December 23, 2009,
Appellant Freida Fitts opened a claim with George Fitts’ umbrella carrier RLI. (CR
2d Supp. 113-114; CR 4th Supp. 6). Mrs. Fitts began forwarding documentation
to RLI on December 30, 2009. (CR 2d Supp. 116; CR 4th Supp. 6). Mrs. Fitts
continued communicating with Kemper and RLI in January 2010. (CR 2d Supp.
125-126; CR 4th Supp. 6).
On February 9, 2010, George Fitts’ estate; his wife and adult children;
William Fitts and his wife Phyllis; and Appellants Billy and Freida Fitts hired
Appellee Gillam & Smith to pursue a product’s liability claim against Toyota and
any parts makers arising out of a defect in George’s Lexus; i.e., the Underlying
Lawsuit. (CR 2d Supp. 128-138; CR 4th Supp. 6). Plaintiffs both signed
contingent fee contracts with Gillam & Smith. (CR 2d Supp. 128-138; CR 4th
Supp. 6). Per the fee agreement, Gillam & Smith associated with the Tracy
Appellees to help prosecute the Underlying Lawsuit. (CR 4th Supp. 6). The fee
agreements, among other things, provided that the clients would “[…] have
authority to accept or reject any final settlement amount after receiving the advice
of our attorneys” ¶ 5. (CR 2d Supp. 128-138; CR 4th Supp. 6-7).
Appellees Brief of E. Todd Tracy and The Tracy Firm 2
Within days of hiring the Tracy Appellees, Appellant Billy Fitts filled out a
client information form, but did not disclose that they had been in constant
communication with George’s insurers for three months. (CR 2d Supp. 140-153;
CR 4th Supp. 7, 61). In the intake form, Mr. Fitts blamed the accident on sudden
acceleration. (CR 2d Supp. 151-152; CR 4th Supp. 7).
It is undisputed that Appellant Mr. Fitts never told Appellant Mrs. Fitts that
he believed George’s driving caused the accident; nor did Mrs. Fitts ever hear him
blame George for causing the accident. (CR 4th Supp. 7, 34-35). When deposed in
this lawsuit, Appellant Mrs. Fitts still believed that the “car speeded up” was the
cause of the underlying accident. (CR 4th Supp. 7, 34-35). Until February 2012,
Appellant Mr. Fitts also believed that a defect in George Fitts’ car caused the
accident. (CR 18, CR 4th Supp. 7, 34-35, 49-51, 59-60). After February 2012,
Mr. Fitts never told anyone that he blamed George for causing the accident. (CR
18, CR 4th Supp. 7, 49). When deposed in this lawsuit, Appellant Mr. Fitts
admitted he still has no evidence that George Fitts actually caused the underling
car accident. (CR 4th Supp. 7, 49).
Based on the information actually provided by Appellants, the Tracy
Appellees commenced working on developing a product’s liability case against
Toyota. (CR 4th Supp. 7). On March 18, 2010, the Tracy Appellees prepared a
Appellees Brief of E. Todd Tracy and The Tracy Firm 3
product’s liability petition and filed it in Harrison County on Appellants’ behalves.
(CR 2d Supp. 168-187; CR 4th Supp. 7).
Seven days after filing suit against Toyota, on March 26, 2010, Appellants
received an offer of settlement and a release from Kemper, George Fitts’ primary
insurance carrier, for a claim Appellants had filed on their own, without the
knowledge, counsel or advice of their lawyers. (CR 2d Supp. 8-9; CR 4th Supp.
8).
The operative language of the Kemper release stated that in exchange for
payment of $250,000, Appellants:
“release, acquit and forever discharge George Fitts, Mary
Fitts and Trinity Universal Insurance Company of and
from and all actions, causes of action, claims or demands
for damages, costs, loss of use, loss of service, expenses,
compensation, consequential damage or any other thing
whatsoever on account of, or in any way growing out of,
and all known and unknown personal injuries and death
and property damage resulting or to result from an
occurrence or accident that happened on or about the 6th
day of November, 2009, at or near Highway 79 Hearne,
Texas.”
(CR, 2d Supp. 8-9; CR 4th Supp. 8). Appellants admit that they read Kemper’s
release before they signed it on March 29, 2010. (CR 4th Supp. 8, 29-30).
It is undisputed that Appellants did not notify the Tracy Appellees of
Kemper’s settlement offer. (CR 4th Supp. 8-9, 31-33, 36-38, 44, 55-58).
Appellants admit they did not disclose or seek Appellees’ legal advice regarding
Appellees Brief of E. Todd Tracy and The Tracy Firm 4
the release. (CR 4th Supp. 8-9, 31-33, 36-38, 44, 55-58). On July 14, 2014,
Appellant Freida Fitts admitted to Kemper that the reason she did not tell
Appellees about the Kemper settlement was because Appellee Smith “would get
half of their settlement.” (CR 2d Supp. 202-203; CR 4th Supp. 10). Appellants
did not tell the Tracy Appellees that they signed the Kemper release, nor did
Appellants provide the Tracy Appellees with a copy of the Kemper release. (CR
4th Supp. 8-10, 31-33, 36-38, 44, 55-58).
After signing the Kemper release, Appellant Freida Fitts informed the excess
carrier RLI that Appellants had settled with Kemper. (CR 2d Supp. 191-193; CR
4th Supp. 9). Not surprisingly, RLI asked for a copy of the Kemper release—in
which Appellants released, acquitted and forever discharged all actions, causes of
action, claims or demands for damages against George Fitts arising from the
automobile accident. (CR 2d Supp. 191-193; CR 4th Supp. 9). RLI received a
copy of the release on August 12, 2010. (CR 2d Supp. 191-193; CR 4th Supp. 9).
Appellants failed to advise the Tracy Appellees that the Kemper release existed or
was forwarded to RLI. (CR 4th Supp. 9, 31-33, 36-38, 44, 55-58).
After Kemper resolved all claims within its policy limits, Kemper closed its
file. (CR 4th Supp. 10). RLI properly closed its file too. (CR 2d Supp. 197; CR
4th Supp. 10). Appellees were not sent a copy of the Kemper release until
October 13, 2010. (CR 4th Supp. 10).
Appellees Brief of E. Todd Tracy and The Tracy Firm 5
In this lawsuit, Appellants’ claims focus exclusively on their alleged lost
opportunity to sue George Fitts and recover against his $5 million umbrella policy
with RLI. (CR 12-17; CR 4th Supp. 9-10). However, once Appellants signed the
Kemper release, the Tracy Appellees were completely barred from suing George
Fitts and recovering against his umbrella policy with RLI, since Appellants had
already released such a claim. (CR 2d Supp. 8-9; CR 4th Supp. 13-14). In
response to Tracy Appellees summary judgment, Appellants admitted that they
could not sue RLI, the insured, directly; Appellants admitted that their claims in
the underlying lawsuit were only against George Fitts—although Appellants
released any and all future claims against George Fitts. (CR 224).
The Tracy Appellees moved for summary judgment: (1) on the affirmative
defense of release, because the Kemper release forever extinguished all claims
Appellants allegedly had against George Fitts and his insurers; (2) that it was
undisputed no conflict of interest existed between Appellants and the other
underlying plaintiffs, negating Appellants’ breach of fiduciary claim; (3) that
Appellants’ own act of releasing any and all claims against George Fitts was the
sole proximate cause of Appellants alleged injuries, which negated the causation
element of Appellants’ legal malpractice claim and (4) that it was undisputed
Appellants could not prove any funds were collectible from RLI, which negated
Appellees Brief of E. Todd Tracy and The Tracy Firm 6
the damage and injury elements of Appellants’ legal malpractice and breach of
fiduciary duty claims. (CR 4th Supp. 12-19).
On December 1, 2014, the trial court granted the Tracy Appellees’ motion
for summary judgment and dismissed all of Appellants’ claims with prejudice. (CR
281).
Appellees Brief of E. Todd Tracy and The Tracy Firm 7
SUMMARY OF THE ARGUMENT
The trial court properly granted the Tracy Appellees’ Traditional Motion for
Summary Judgment – Release on several grounds. First, the Tracy Appellees
properly presented undisputed evidence to support their affirmative defense of
release. Second, it was undisputed that no conflict of interest existed between
Appellants and the other underlying plaintiffs, negating Appellants’ breach of
fiduciary claim. Third, Appellants’ own, unilateral act of releasing any and all
claims against George Fitts was the sole proximate cause of Appellants’ alleged
damages, which negated the causation element of Appellants’ legal malpractice
claim. Fourth, it was undisputed that Appellants could not prove any funds were
collectible from RLI, which negated the damage and injury elements of
Appellants’ legal malpractice and breach of fiduciary duty claims. The trial court
properly ordered that all of Appellants’ claims were dismissed with prejudice.
Appellants also waived their issues on appeal by failing to cite to evidence in
the record, cite to authorities, or precisely present their arguments with analysis of
any errors allegedly committed by the trial court. Appellants also failed to bring
forward and challenge on appeal that the Kemper release barred Appellants’
underlying claims based on the unambiguous language of the RLI umbrella policy.
Appellants’ failure to bring forward this issue warrants affirmance of summary
judgment for the Tracy Appellees.
Appellees Brief of E. Todd Tracy and The Tracy Firm 8
ARGUMENT
I. SUMMARY JUDGMENT SHOULD BE AFFIRMED BASED ON
APPELLANTS’ FAILURE TO ADEQUATLY BRIEF THE ISSUES
A. APPELLANTS WAIVED THEIR COMPLAINTS BY FAILING TO
ADEQUATELY BRIEF THE ISSUES ON APPEAL
An appellate brief must contain all issues relied upon, argument and
authorities under each issue, and all facts relied upon with references to the record.
See Tex. R. App. P. 38.1(i)(requiring both citation to authority and substantive
analysis in regard to an issue in the appellant’s brief); see Weaver v. Sw. Nat’l
Bank, 813 S.W.2d 481, 481 (Tex. 1991)(per curiam). The failure to adequately
brief an issue results in its waiver on appeal. See In re ADA, 287 S.W.3d 382, 390
(Tex.App.—Texarkana 2009, no pet.).
Throughout the Argument section of their brief, Appellants failed to cite to
evidence in the record, failed to cite to authorities, and failed to specifically
identify and analyze any errors allegedly committed by the trial court. See Brief of
Appellants, pp. 16-48. Many of Appellants’ statements in their brief were not
presented to the trial court and are not contained in the clerk’s record. See Brief of
Appellants, pp. 16-48. As such, Appellants’ waived their issues on appeal. See In
re ADA, 287 S.W.3d at 390 (the failure to adequately brief an issue results in its
waiver on appeal); see Tex. R. App. P. 33.1(a)(as a prerequisite to presenting a
Appellees Brief of E. Todd Tracy and The Tracy Firm 9
complaint for appellate review, the record must show that the complaint was made
to the trial court).
B. SUMMARY JUDGMENT MUST BE AFFIRMED BASED ON
APPELLANTS’ FAILURE TO CHALLENGE A GROUND UPON WHICH
THE TRIAL COURT GRANTED SUMMARY JUDGMENT
The trial court did not specify the grounds upon which it granted the Tracy
Appellees motion for summary judgment. (CR 281). When a trial court's order
granting summary judgment does not specify the ground(s) upon which it relied for
its ruling, summary judgment will be affirmed on appeal if any of the theories
advanced are meritorious. Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex.
1995) (citing Carr v. Brasher, 776 S.W.2d 567, 569 (Tex.1989)). The appellate
court must affirm the summary judgment if any one of the movant's theories has
merit. Id.
Tracy Appellees advanced several arguments to the trial court in support of
their motion for summary judgment. (CR 4th Supp. 12-16). One argument made
by the Tracy Appellees was that the Kemper release for policy limits of $250,000,
and not one dollar more, prevented the excess policy with RLI from being
triggered based on the unambiguous language of the RLI umbrella policy (CR 4th
Supp. 12-16; CR 6th Supp. 6-12); see American Nat. Fire Ins. Co. v. Hammer
Trucking, Inc., No. 2-04-327-CV, 2006 WL 3247906 at *3 (Tex.App.—Fort Worth
Nov. 9, 2006, pet. denied) (mem.op.)(if a settlement agreement forever discharges
Appellees Brief of E. Todd Tracy and The Tracy Firm 10
any and all claims a party has against an insured in exchange for the underlying
carrier’s policy limits and not one dollar more, then the excess carrier’s duty to
indemnify and pay is never triggered). 2
The Tracy Appellees argued that, based on the language in the RLI policy, it
was undisputed that the Kemper release eliminated Appellants’ ability to establish
proximate cause, to prove Appellants were harmed, and to provide evidence that
their alleged damages were collectible. (CR 4th Supp. 12-16, CR 6th Supp. 6-12).
The insuring language of George Fitts’ RLI umbrella policy states that:
We will pay an amount for which anyone covered by this
policy becomes legally liable for Injury due to an
Occurrence which takes place during the Policy Period
and in the Policy Territory. This insurance applies:
a. As excess insurance over and above the greater of (1)
the Minimum Limit of Coverage as stated in the
Declarations which is required to be provided by the
Basic Policies…
2
Primary insurance coverage is insurance coverage whereby, under the terms of
the policy, liability attaches immediately upon the happening of the occurrence that
gives rise to the liability. Emscor Mfg., Inc. v. Alliance Ins. Group, 879 S.W.2d
894, 903 (Tex. App.—Houston [14th Dist.] 1994, writ denied) (citing Union Indem
Ins. Co. of New York v. Certain Underwriters at Lloyd's, 614 F. Supp. 1015, 1017
(S.D. Tex. 1985). An excess or umbrella policy, on the other hand, is one that
provides that the insurer is liable for the excess above and beyond that which may
be collected on primary insurance. Id. In a situation where there is primary and
excess insurance coverage, the limits of the primary insurance must be exhausted
before excess insurance is implicated. Id.
Appellees Brief of E. Todd Tracy and The Tracy Firm 11
(CR 2d Supp. 71) 3 Substituting into RLI’s insuring language the definitions from
RLI (see footnote two below), the following insuring statement results:
RLI will pay an amount which George Fitts becomes
obligated to pay by judgment or by settlement agreement
for Billy Fitts’ bodily harm due to the November 6, 2009
automobile accident […].
This insurance applies as excess insurance over and
above the greater of the $250,000 Limit of Coverage as
stated in the Declarations which is required to be
provided by Kemper…
(CR 6th Supp. 9-11).
In either the policy’s actual language or in the translated language above,
RLI’s obligations become clear—RLI would pay for Billy Fitts’ bodily harm
3
RLI defined “Injury” to mean bodily injury, which means “bodily harm, sickness
or disease (including required care, loss of services, and death) to others.” (CR 2d
Supp. 69). RLI defined “Occurrence” to mean “an accident, including continuous
or repeated exposure to the same general harmful conditions, that results in Bodily
Injury or Property Damage.” (CR 2d Supp. 69). RLI defined “Basic Policies” to
mean the policies included in the Declarations that provided primary liability
coverage for the Minimum Limit of Coverage listed. (CR 2d Supp. 69). As the
named insured on the RLI policy, George Fitts is “covered by this policy” for the
vehicle he owned that was involved in the November 6, 2009 accident. (CR 2d
Supp. 67, 70). RLI did not define “legally liable,” but Texas courts interpreting
similar language in umbrella policies have held that a covered person becomes
legally liable to pay an amount “only after an insured’s legal responsibility for
covered damages has been established by judgment or settlement.” Ohio Cas. Ins.
Co. v. Time Warner Entertainment Co., L.P., 244 S.W.3d 885, 890 (Tex.App.—
Dallas 2008, pet. denied); see also Mid-Continent Cas. Co. v. Castagna, 410
S.W.3d 445, 448 fn.1 (Tex.App.—Dallas 2013, no. pet.); Haygood v. Hawkeye Ins.
Services, Inc., No. 12-11-00262CV, 2012 WL 1883811 at *2 (Tex.App.—Tyler
May 23, 2012, no pet.) (mem.op.) (insured’s obligation to pay must be established
by judgment after trial or by written settlement agreement).
Appellees Brief of E. Todd Tracy and The Tracy Firm 12
related to the November 6, 2009 accident once there is a judgment or settlement
agreement, and RLI would only pay the amount of the judgment or settlement
agreement that exceeds Kemper’s $250,000. (CR 6th Supp. 11). To get to RLI’s
policy, Appellants needed a Kemper settlement agreement that required George
Fitts to pay more than $250,000. (CR 6th Supp. 11). Appellants did not have this.
(CR 2d Supp. 8-9; CR 6th Supp. 11). Instead, Appellants signed a settlement
agreement with Kemper that clearly stated that Appellants were forever
discharging any and all claims they had against George Fitts for exactly $250,000.
(CR 2d Supp. 8-9; CR 6th Supp. 11).
As a matter of law, the trial court properly interpreted that Appellants’
release with Kemper for $250,000, and not one dollar more, prevented the RLI
policy from being triggered based on the language in the RLI umbrella policy. See
Grain Dealers Mut. Ins. Co. v. McKee, 943 S.W.2d 455, 458 (Tex.1997)(It is well
established that the interpretation of an unambiguous contract or insurance policy
is a question of law for a court); see also Texas Gas Exploration Corp. v. Fluor
Corp., 828 S.W.2d 28, 33 (Tex. App.—Texarkana 1991, writ denied). Further,
courts routinely determine insurance coverage questions as a matter of law. J.E.M.
v. Fid. & Cas. Co. of New York, 928 S.W.2d 668, 676 (Tex. App.—Houston [1st
Dist.] 1996, no writ) (no further discovery was necessary because the terms of the
policy and the pleadings alone defined the insurer's duty to defend). An
Appellees Brief of E. Todd Tracy and The Tracy Firm 13
unambiguous contract will be enforced as written and parol evidence will not be
received. David J. Sacks, P.C. v. Haden, 266 S.W.3d 447, 450 (Tex. 2008)(citing
Universal C.I.T. Credit Corp. v. Daniel, 243 S.W.2d 154, 157 (1951)).
Appellants failed to bring forward and challenge on appeal that the Kemper
release also barred Appellants’ underlying claims based on the unambiguous
language of the RLI umbrella policy. See Brief of Appellants (no discussion or
analysis of the language in RLI’s umbrella policy barring Appellants’ claims).
Appellants’ failure to bring forward this issue warrants affirmance of summary
judgment for the Tracy Appellees. See Star-Telegram, Inc. v. Doe, 915 S.W.2d at
473 (the granting of summary judgment will be affirmed on appeal if any of the
theories advanced are meritorious).
REPLY TO ISSUE 1: Summary Judgment was proper because the Kemper
Release—which Appellants signed behind their counsel’s back and without
their knowledge—extinguished Appellants’ ability to recover anything from
George Fitts’ umbrella policy with RLI.
A release of claims surrenders legal rights or obligations between the parties
to an agreement and operates to extinguish the claim or cause of action as
effectively as would a prior judgment between the parties. See Dresser Industries,
Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508 (Tex. 1993).
The Tracy Appellees agree with Appellants that a valid release is a complete
bar to any later action based on the matters covered by the release. See Schomburg
Appellees Brief of E. Todd Tracy and The Tracy Firm 14
v. TRW Vehicle Safety Systems, Inc., 242 S.W.3d 911, 913 (Tex.App.—Dallas
2008, no pet.)(citing Deer Creek Ltd. v. N. Am. Mortg. Co., 792 S.W.2d 198, 201
(Tex.App.—Dallas 1990, no writ); see Brief of Appellants, p. 15. The Tracy
Appellees agree that a release applies to a party that is either specifically identified
in the release or described with reasonable particularity. See Schomburg, 242
S.W.3d at 913 (citing Cessna Aircraft Co., 665 S.W.2d 414, 419 (Tex. 1984); see
Brief of Appellants, p. 15; see also Deer Creek Ltd., 792 S.W.2d at 201 (a release,
valid on its face until set aside, is a complete bar to any later action based on
matters covered in the release).
Here, the trial court properly granted the Tracy Appellees summary
judgment because the plain language of the Kemper release is absolute and
unyielding that, in exchange for $250,000, Appellants forever discharged George
Fitts from “all actions, causes of action, claims or demands for damages, costs, loss
of use, loss of service, expenses, compensation, consequential damage or any other
thing whatsoever on account of, or in any way growing out of, and all known and
unknown personal injuries and death and property damage resulting or to result
from” any other thing whatsoever on account of, or in any way growing out of the
November 6, 2009 accident on Highway 79 in Hearne, Texas. (CR 281, CR 2d
Supp. 8-9).
Appellees Brief of E. Todd Tracy and The Tracy Firm 15
Appellants’ argument that the Kemper release had to specifically name and
release RLI is inaccurate. See Brief of Appellants, p. 17-19. The protection in a
release applies to the alleged tortfeasor. See Schomburg, 242 S.W.3d at 914 (a
“tortfeasor can claim the protection of a release only if the release refers to him by
name or with such descriptive particularity that his identify or his connection with
the tortious event is not in doubt.”)(quoting Duncan v. Cessna Aircraft Co., 665
S.W.2d 414, 419 (Tex. 1984)). Further, a release must only mention the claim to
be released, but it is not necessary for the parties to anticipate and identify every
potential cause of action relating to the subject matter of the release. See Baty v.
Protech Insurance Agency, 63 S.W.3d 841, 848 (Tex.App.—Houston [14th Dist.]
2002, no. pet.)(citing Victoria Bank & Trust Co. v. Brady, 811 S.W.2d 931, 938
(Tex. 1991); Keck, Mahin & Cate v. Nat’l Union Fire Co., 20 S.W.3d 692, 698
(Tex.2000)).
A valid release may encompass unknown claims and damages that develop
in the future. Keck, 20 S.W.3d at 698; see also Schomburg, 242 S.W.3d at 914, 915
(release of “all claims, actions, demands and causes of action owned or held by
[the Schomburgs]…that arise from, result from, or in any way relate to the accident
in question that occurred on or about November 17, 2003 in Dallas County”
sufficient to release company, not named in release, that supplied parts to GM for
Appellees Brief of E. Todd Tracy and The Tracy Firm 16
the manufacture of the vehicle that was alleged not to be crashworthy in
subsequent lawsuits).
Here, Appellants specifically released claims against George Fitts, the
alleged tortfeasor. (CR 2d Supp. 8-9). By releasing any and all claims against
George Fitts, Appellants were barred from asserting claims against George Fitts’
excess insurance carrier. See Pool v. Durish, 848 S.W.2d 722, 723 (Tex.App.—
Austin 1992, writ denied); 4 see also Schomburg, 242 S.W.3d at 914. Appellants
were also barred from asserting additional claims for any personal injuries, death
and property damage against any other persons or companies since those matters
were sufficiently mentioned in the release. (CR 2d Supp. 8-9); see Schomburg,
242 S.W.3d at 914, 915.
Appellants admitted to the trial court in paragraph 30 of their summary
judgment response that they could not directly sue RLI, but instead their claims
were against the insured George Fitts. (CR 224). However, Appellants released all
claims that could be asserted against George Fitts. (CR 2d Supp. 8-9). Appellants
4
A party who releases an insured from liability retains no cause of action against
the insurer. Pool, 848 S.W.2d at 723; Angus Chemical Co. v. IMC Fertilizer, Inc.,
939 S.W.2d 138 (Tex. 1997)(affirming summary judgment and holding that
plaintiff could not sue insurers for liability for which insured had been released;
release precluded prerequisite determination of insured's liability); Lowe v. Safeco
Ins. Co., 2003 WL 21731306 (Tex. App.-Dallas 2003, pet. denied) (holding third
party cannot sue an insurance company in Texas); see Morris v. Allstate, 523 S.W.
299 (Tex. Civ. App.-Texarkana 1975, no writ) (tort claimant has no direct cause of
action against the tortfeasors liability carrier unless the tortfeasor is liable to the
claimant).
Appellees Brief of E. Todd Tracy and The Tracy Firm 17
own admission that they could not recover anything from RLI—unless they could
sue George Fitts, the same person Appellants released any and all claims against—
is dispositive and outcome determinative. (CR 224; CR 2d Supp. 8-9).
Since Appellants were barred from suing George Fitts based on their own
release with Kemper, the Tracy Appellees were equally barred and cannot be liable
for not doing what Appellants themselves were prohibited from doing. (CR 2d
Supp. 8-9; CR 4th Supp. 12-14). The trial court properly granted summary
judgment because Appellants cannot establish that the Tracy Appellees caused
them any harm by failing to pursue a claim that the Appellants had already
released in full. (CR 281; CR 2d Supp. 8-9; CR 4th Supp. 12-14)
A. Contrary to Appellants’ argument, the unambiguous release of all
claims against George Fitts released both of George Fitts’ insurers,
Kemper and RLI.
Appellants’ argument that a full release of all claims under a primary policy
allows additional recovery under an umbrella policy is inaccurate, and the case
cited by Appellants, Barker v. Roelke, 105 S.W.3d 75 (Tex.App.—Eastland 2003,
pet. denied), does not hold as such. Brief of Appellants, pp. 17-18. 5
5
Appellants also argue on appeal, without citing to any authority, that the
“execution of separate releases under both the primary automobile policy and the
umbrella policy is standard industry practice.” See Brief of Appellants, p. 18.
Appellants argued before the trial court that Barker v. Roelke supported this
argument. (CR 224). Barker does not hold as such.
Appellees Brief of E. Todd Tracy and The Tracy Firm 18
In Barker, the defendant’s daughter was killed in an automobile accident.
Barker, 105 S.W.3d at 70. The defendant settled and executed two written
settlement agreements releasing the Roelkes and their insurers from claims arising
from an automobile accident—one agreement was with the primary insurer for
policy limits of $100,000, and the second agreement was with the excess carrier for
$400,000. Id. at 80-81. The defendant’s ex-wife subsequently settled all of her
claims against the Roelkes, their attorneys and their insurers for $5.5 million. Id.
at 81. The defendant attempted to rescind his settlement agreements, but the trial
court enforced the releases and granted summary judgment on all claims. Id. at 82.
The court of appeals affirmed. Id. at 88. There is no language in Barker that two
releases must be executed. There is also no language or analysis in Barker that an
excess carrier must execute its own release.6 Appellants’ argument that Barker
holds as such is without merit. See Brief of Appellants, pp. 17-18.
6
As the Tracy Appellants have already presented to this Court, the doctrine of
release does not require the party claiming that the plaintiff’s claims are barred to
have been specifically mentioned in the release. See, e.g., Schomburg, 242 S.W.3d
at 914, 915 (release of “all claims, actions, demands and causes of action owned or
held by [the Schomburgs]…that arise from, result from, or in any way relate to the
accident in question that occurred on or about November 17, 2003 in Dallas
County” sufficient to release company, not named in release, that supplied parts to
GM for the manufacture of the vehicle that was alleged not to be crashworthy in
subsequent lawsuits). Barker also held that State Farm Fire & Casualty Company
was released from liability, even though it was not specifically named or identified
in the release itself. See Barker, 105 S.W.3d at 88.
Appellees Brief of E. Todd Tracy and The Tracy Firm 19
Appellants also misstate the holding of Baty v. Protech Insurance Agency,
63 S.W.3d 841 (Tex.App.—Houston [14th Dist.] 2001, no pet.). See Brief of
Appellants, pp. 19. In Baty, BAI brought suit against two former company officers
and those officers’ new insurance agency, based on a non-compete and/or non-
solicitation agreement between the parties. Baty, 63 S.W.3d at 846. The parties
settled that first lawsuit, and BAI released claims related to the non-compete and/or
non-solicitation agreement between the parties. Id. at 849. BAI then filed suit
again, asserting tort claims. Id. The defendants moved for summary judgment
which the trial court granted. Id. The court of appeals reversed on the issue of
release, finding that BAI’s release was not broadly drafted but expressly restricted
to only release contract claims arising from the prior non-compete and/or non-
solicitation agreement between the parties. Id. at 849-50.
The Baty decision does not apply to this case because—unlike BAI’s limited
release of claims related to a specific non-compete and non-solicitation
agreement—the Kemper release executed by Appellants was a broad form release
of any and all claims, whether known or unknown, related to the November 6,
2009 car accident. (CR 2d Supp. 8-9). As Baty instructs, courts will not hesitate to
find that claims were released in a broad form general release of all claims. Baty,
63 S.W.3d at 849.
Appellees Brief of E. Todd Tracy and The Tracy Firm 20
Similarly, Appellants’ unsubstantiated “public policy” argument that a
claimant will not be able to settle with a primary carrier prior to setting with the
excess carrier is without merit. See Brief of Appellants, pp. 19-20. Appellants
could have chosen not to release “any and all claims” against George Fitts.
Appellants could have also chosen to settle above Kemper’s $250,000 policy limits
to trigger the excess policy. See American Nat. Fire Ins. Co., 2006 WL 3247906 at
*3. Instead, Appellants executed a broad general release of any and all claims for
exactly $250,000. (CR 2d Supp. 8-9).
Appellants executed the broad, general release of any and all claims behind
their counsel’s back, in order to avoid paying attorney’s fees from the settlement.
(CR 2d Supp. 8-9; CR 4th Supp. 31-33, 36-38, 44, 55-58). By signing the Kemper
release without the advice of Appellees, Appellants solely caused their own
injuries, if any. (CR 4th Supp. 15). Appellants’ unsupported argument that this
case will change an insurance company’s settlement of claims or deserves court
interference based on “public policy” arguments is meritless. See Brief of
Appellants, pp. 19-20.
Appellants waived the remainder of their arguments in this section by failing
to include citations to the record or cite to authorities in their brief. See Brief of
Appellants, pp. 17-20; see Tex. R. App. P. 38.1(i); see In re ADA, 287 S.W.3d at
390.
Appellees Brief of E. Todd Tracy and The Tracy Firm 21
B. Appellants Argument, Raised for the First Time on Appeal, that the
Trial Court Should Not have Granted Summary Judgment so
Appellants Could Assert Claims against non-party Kemper, is not only
Nonsensical but has been Waived.
For the first time on appeal, Appellants attempt to argue that Appellants
could have rescinded the Kemper release on the basis of mutual mistake or
fraudulent inducement. See Brief of Appellants, pp. 21-27. Appellants failed to
raise any of these arguments before the trial court. (CR 216-239). Not only were
these claims not raised by Appellants in response to the Tracy Appellees motion
for summary judgment, these new allegations against non-party Kemper were not
contained in Appellants’ petition. (CR 12-17). Appellants attempt to invent new
claims against non-party Kemper on appeal are impermissible and have been
waived. See Tex. R. App. P. 33.1(a).
Appellants’ arguments were also waived in this section because their brief
fails to include appropriate citations to authorities and to the record to support their
contentions. See Tex. R. App. P. 38.1(i); see In re ADA, 287 S.W.3d at 390.
C. Contrary to Appellants’ Argument, it is Undisputed There Was No
Conflict of Interest
Appellants waived their arguments in this section by failing to include
citations to the record or cite to any authorities in their brief. See Brief of
Appellants, pp. 27-33; see Tex. R. App. P. 38.1(i); see In re ADA, 287 S.W.3d at
390. Several of Appellants “statements” in their brief regarding the alleged
Appellees Brief of E. Todd Tracy and The Tracy Firm 22
conflict of interest were not before the trial court and are not contained in the
record. See, e.g., Brief of Appellants, pp. 28-29; (CR 227-233).
However, even if the Court were to consider Appellants’ argument,
summary judgment was proper. (CR 281). In their petition, the Appellants
complained that the Tracy Appellees had an undisclosed conflict of interest in
representing both George Fitts’ estate and Appellants in their claims against the
Toyota, the automobile manufacturer of George Fitts’ Lexus. (CR 14, 16). The
Appellants also alleged that the Tracy Appellees breached their fiduciary duties
when they informed Appellants that bringing a claim against George Fitts’ estate
would harm their claim against Toyota. (CR 16). According to Appellants, this
conflict injured them because it prevented the Tracy Appellees from pursuing
claims against George Fitts. (CR 16).
Tracy Appellees moved for summary judgment as it was undisputed there
was no conflict of interest between George Fitts’ estate and Appellants. (CR 4th
Supp. 17-19). At all times from February 9, 2009, when Appellants hired the
Tracy Appellees, until February 2012, the Appellants blamed the car—not George
Fitts—for the automobile accident. (CR 18, CR 4th Supp. 34-35, 49-51, 59-60).
Appellant Billy Fitts provided the uncontroverted fact that the car caused the
accident in his February 2010 client intake form with the Tracey Appellees. (CR
2d Supp. 140, 151-152; CR 4th Supp. 61). Appellant Billy Fitts verified this
Appellees Brief of E. Todd Tracy and The Tracy Firm 23
uncontroverted fact in his underlying lawsuit interrogatory responses. (CR 4th
Supp. 62). Mr. Fitts also testified under oath and penalty of perjury to this
uncontroverted fact in his underlying lawsuit deposition. (CR 4th Supp. 49-51).
These were the facts the Tracy Appellees had when they determined that there was
no claim against George Fitts and thus, no conflict between their clients. (CR 6th
Supp. 14-15).
Limitations ran to sue George Fitts on November 6, 2011, two years after the
car accident. See Tex. Civ. Prac. & Rem. Code § 16.003. During this time, it is
undisputed that Appellants still blamed only the car—not George Fitts—for the
accident. (CR 18; CR 4th Supp. 34-35, 49-51, 59-60; 6th Supp. 14). Because the
Tracy Appellees proved there was no alleged conflict of interest based on these
fundamental, uncontested, uncontroverted facts, the trial court properly granted
summary judgment. (CR 281; CR 4th Supp. 17-19; CR 6th Supp. 14-15).
Appellants’ case is premised on the theoretical assumption that Appellees
should have known that Billy Fitts’ intake form, verified interrogatories, and sworn
testimony were wrong. (CR 6th Supp. 14). According to Appellants’ allegations,
the lawyers should have known that Billy Fitts really did, deep down inside, blame
his brother George for the accident and they should have acted accordingly; i.e.,
investigate George Fitts’ liability and counsel them about the conflicts of interest
this investigation would create. (CR 6th Supp. 14). From Appellants’ perspective,
Appellees Brief of E. Todd Tracy and The Tracy Firm 24
the lawyers should have ignored everything Billy Fitts actually told them, under
oath and otherwise, about the cause of the accident and should have pursued a
lawsuit against George Fitts. (CR 6th Supp. 14-15).
In Texas, an attorney can only evaluate possible claims and potential
conflicts using the information the client provides. See Cosgrove v. Grimes, 774
S.W.2d 662, 664 (Tex. 1989)(must evaluate lawyer’s conduct based on the
information the attorney has at the time); Texas Ethics Opinion 624 (if in the early
stages of representation a lawyer reasonably believes that there is no significant
likelihood of the possibility of a future conflict developing, then there is no Rule
1.06(b)(2) conflict). Appellants have cited no authority for the breathtaking
proposition that a lawyer must ignore their client and be clairvoyant. (CR 6th
Supp. 15).
Appellants’ citation in their brief to the disciplinary rules does not create an
independent claim in Texas or in any way dispute all uncontroverted evidence that
no conflict of interest existed. See Judwin Props., Inc. v. Griggs & Harrison, P.C.,
981 S.W.2d 868, 870 (Tex.App.—Houston [1st Dist.] 1998, pet. denied per
curiam, 11 S.W.3d 188 (Tex. 2000)(preamble to Texas Disciplinary Rules of
Professional Conduct provides that a violation of the disciplinary rules does not
create civil liability); see also Bergthold v. Winstead Sechrest & Minick, P.C.,
Appellees Brief of E. Todd Tracy and The Tracy Firm 25
2009 WL 226026, at *5, no. 5 (Tex.App.—Fort Worth 2008, no pet.)(“A private
cause of does not exist for violation of the disciplinary rules”).
Tracy Appellees also moved for summary judgment that the Kemper release
created an absolute bar against the Tracy Appellees from bringing future claims
against George Fitts, which negated the damage and injury elements of Appellants’
legal malpractice and breach of fiduciary claims. (CR 4th Supp.15-19).
By releasing their claims against George and Mary Fitts, Appellants created
an absolute bar against the Tracy Appellees from bringing future claims against
George Fitts. (CR 2d Supp. 8-9; CR 4th Supp. 13-14). According to the plain
language of the Kemper release, Appellants had forever discharged George and
Mary Fitts from any further obligation to pay Appellants for anything related to the
November 6, 2009 accident. (CR 2d Supp. 8-9). Appellants signed the Kemper
release, without the knowledge or counsel of the Tracey Appellees, just eight days
after the Tracy Appellees had filed an original petition in Harrison County against
Toyota for a defect in the car. (CR 2d Supp. 8-9; CR 2d Supp. 168-187; CR 4th
Supp. 31-33, 36-38, 44, 55-58).
Whatever recommendations the Tracy Appellees might have proposed as the
Underlying Lawsuit developed vis-à-vis George’s estate were permanently
foreclosed once Appellants signed the Kemper release. (CR 2d Supp. 8-9; CR 4th
Supp. 16). Appellants own acts made it impossible for the Tracy Appellees to take
Appellees Brief of E. Todd Tracy and The Tracy Firm 26
the actions Appellants complain of in this lawsuit. (CR 2d Supp. 8-9; CR 4th
Supp. 16).
Moreover, because of the Kemper release, had the Tracy Appellees sued
George Fitts, Plaintiffs would have been in exactly the same position back then
that they are in today – $250,000 in their pocket from Kemper’s policy and facing
a summary judgment (filed by George’s lawyers) arguing release. (CR 2d Supp. 8-
9; CR 4th Supp. 16). Thus, Appellants are in no different position today, which is
the quintessential definition of a party that has not suffered any harm. (CR 2d
Supp. 8-9; CR 4th Supp. 16). As such, the trial court properly granted summary
judgment on Appellants’ claims. (CR 281).
REPLY TO ISSUE 2: The Trial Court Properly Granted Summary Judgment
because the Kemper Release Negated the Causation Element of Appellants’
Legal Malpractice Claim.
Tracy Appellees moved for summary judgment that the Appellants own
conduct in executing the Kemper release was the sole proximate cause of
Appellants’ alleged claim. (CR 4th Supp. 15-17).
In a legal malpractice case, the plaintiff must prove that the defendant’s
breach of duty proximately caused the plaintiff’s injury and that damages occurred.
See Cosgrove v. Grimes, 774 S.W.2d 662, 665(Tex.1989). Texas has long
recognized that the client’s own conduct can be the sole proximate cause and can
break any causal link that might otherwise exist. Peeler v. Hughes & Luce, 909
Appellees Brief of E. Todd Tracy and The Tracy Firm 27
S.W.2d 494, 498(Tex. 1995)(client at no time asserted she did not commit the acts
which formed the basis of the matters charged, and therefore her acts were the sole
proximate cause).
Appellees complain that the Tracy Appellees prevented them from pursuing
negligence claims against George Fitts’ umbrella insurance policy with RLI. (CR
14-16; CR 4th Supp. 12). The Tracy Appellees had until November 6, 2011 to
bring such a claim. (CR 4th Supp. 12); (CR 217)(accident occurred November 6,
2009); see Tex. Civ. Prac. & Rem. Code § 16.003 (two year statute of limitations).
However, without asking the Tracy Appellees for legal advice, without
informing the Tracy Appellees that they had received a settlement offer from
Kemper, and without providing the Tracy Appellees with a copy of the Kemper
release, Appellants signed the Kemper release on March 26, 2010. (CR 2d Supp. 8-
9; CR 4th Supp. 8-9, 15, 31-33, 36-38, 44, 55-58). By signing that release,
Appellants own actions barred Appellants from pursuing claims against George
Fitts and receiving any funds from RLI. (CR 2d Supp. 8-9; CR 4th Supp. 15).
Appellants proximately caused the loss complained of in their negligence claim.
(CR 2d Supp. 8-9; CR 4th Supp. 16-17)
In support of summary judgment, Tracy Appellees cited the trial court to and
Hamlin v. Gutermuth, 909 S.W.2d 114 (Tex.Civ.App. [14th Dist.] Houston, 1995).
Appellees Brief of E. Todd Tracy and The Tracy Firm 28
(CR 4th Supp. 16). 7 In Hamlin, the clients negotiated a side letter to a business
transaction. Hamlin, 909 S.W.2d at 115. The lawyer did not participate in, or know
of the existence of the negotiations, of the side letter or know of its preparation. Id.
The clients did not even apprise the lawyer of the side letters existence, although
the side letter and other papers were delivered to the lawyer for his safe keeping.
Id. In affirming summary judgment on causation in favor of the lawyer defendant,
the Court pointed out that the clients did not consult with the lawyer Defendants
concerning the side letter. Id. at 116-17. The court found there was no evidence
that the client’s injuries were caused by the lawyers’ actions or failure to act. Id. at
117. Instead, the court found there was no causal relationship between the
damages sued for, the actions of the lawyers and the alleged injury suffered by the
client. Id.
Here, as in Hamlin, Appellants did not disclose their efforts to obtain a
settlement with Kemper and RLI that had been going on for months at the time of
7
The Tracy Appellees also cited the court to Rodgers v. Weatherspoon, 141
S.W.3d 342 (Tex.App.—Dallas 2004). (CR 4th Supp. 15). In Rodgers, a
represented party filed pro se motions and personally visited the court. Rodgers,
141 S.W.3d at 343. During one of his visits to the court, the plaintiff was arrested
because the trial judge determined that his bail was not sufficient. Id. The plaintiff
claimed that the court clerk told him that if his attorney would come to the court,
the plaintiff would be released to his attorney and would not have to go to jail. Id.
After spending six days in jail, the client sued his lawyer for malpractice. Id. at
343-44. Summary judgment was affirmed for the lawyer because it was the trial
judge’s decision to hold the client’s bond insufficient that caused the alleged
injury, not the lawyer’s conduct. Id. at 346.
Appellees Brief of E. Todd Tracy and The Tracy Firm 29
the retention of the Tracy Appellees. (CR 2d Supp. 140-153; CR 4th Supp. 7, 61).
Appellants did not disclose the offer of settlement from Kemper at the time it was
made forty-five days after the signing of the fee agreement and after a lawsuit had
been filed against Toyota in Harrison County. (CR 2d Supp. 8-9, 140-153; 168-
187; CR 4th Supp. 7-10, 31-33, 36-38, 44, 55-58, 61).
Instead, by signing the release behind the backs of the Tracy Appellees,
Appellants settled and released not only the claim that could be asserted against
George Fitts, but also the claim that could be asserted through George Fitts with
RLI. (CR 2d Supp. 8-9). Instead of consulting with the lawyer Appellees,
Appellants sought to hide the settlement from the lawyers for another six months
before finally admitting that they had settled with Kemper. (CR 4th Supp. 8-10,
31-33, 36-38, 44, 55-58). The Appellants deprived the Appellees of the ability to
advise them regarding Kemper’s release and the effect the release would have on
their lawsuit. (CR 4th Supp. 8-10, 31-33, 36-38, 44, 55-58). It is clear that they
hid their negotiations with Kemper and the release in order to beat the Appellees
out of their fee. (CR 2d Supp. 202-203; CR 4th Supp. 10).
In their brief, Appellants cite to Brown v. Holman, 335 S.W.3d 792
(Tex.App.—Amarillo 2011, no pet.) for the proposition that sole cause is an
inferential rebuttal defense, and the defense must do more than simply raise an
Appellees Brief of E. Todd Tracy and The Tracy Firm 30
alternative theory of causation but instead conclusively disprove the plaintiff’s
allegations. Brief of Appellants, p. 34.
Brown actually supports the trial court’s summary judgment for the Tracy
Appellees. In Brown, an employer instructed his employee, Brown, to clean out a
storage building surrounded by a three-rail fence made of two-inch pipes. Brown,
335 S.W.3d at 794. The employer instructed employee Brown to park his pickup
truck behind the fence. Id. Brown was injured while attempting to climb the fence
while holding a sixty-pound clay mold. Id. Summary judgment was affirmed for
the employer—finding Brown was the sole proximate cause of his own injuries—
because Brown alone chose to scale the fence while carrying the clay mold, the
injury would not have occurred but for Brown’s decision, and a person of ordinary
prudence would have anticipated the danger of slipping while scaling the pipe
fence with a heavy object. Id. at 796-97.
Here, just as in Brown, Appellants were the sole proximate cause of their
own injuries. Appellants signed a release of any and all claims against George
Fitts without the advice or knowledge of the Tracy Appellees. (CR 2d Supp. 8-9;
CR 4th Supp. 8-9, 31-33, 36-38, 44, 55-58). The release that Appellants signed
released any and all future claims against George Fitts. (CR 2d Supp. 8-9).
Appellants have admitted that Appellants’ only access to RLI’s excess policy was
by suing the insured, George Fitts—the same person Appellants released all future
Appellees Brief of E. Todd Tracy and The Tracy Firm 31
claims against. (CR 224). Appellants chose to sign the release on their own,
behind their counsel’s back. (CR 4th Supp. 8-9, 17, 31-33, 36-38, 44, 55-58).
Appellants’ alleged injury would not have occurred but for Appellants’ decision to
release George Fitts of any future liability. (CR 4th Supp. 17). The trial court
correctly decided that a person of ordinary prudence would not have behaved as
Appellants. (CR 281). The trial court correctly decided that a person of ordinary
prudence would have anticipated the danger of signing a release of any and all
claims against George Fitts—based on the plain language of the release executed
by Appellants. (CR 281; CR 2d Supp. 8-9). The trial court correctly decided that
the release Appellants signed, behind their counsel’s back and without the advice
of counsel, was the sole proximate cause of Appellants alleged injuries. (CR 4th
Supp. 17). The trial court properly dismissed Appellants’ claims against the Tracy
Appellees. (CR 281).
In their brief, Appellants also cite to Kuemmel v. Vradenburg, 239 S.W.2d
869 (Tex. 1951) for the proposition that a person owing a duty must have had no
opportunity to resolve the alleged actions to be the sole proximate cause. Brief of
Appellants, p. 34. Kuemmel does not state or hold as such. Kuemmel does not
apply to this case because the Tracy Appellees are not attempting to impute the
Appellees Brief of E. Todd Tracy and The Tracy Firm 32
Appellants’ actions to another.8 To be clear, the Appellants own actions in
signing the Kemper release are the sole proximate cause of Appellants alleged
injuries. (CR 2d Supp. 15-17).
Furthermore, this Court should affirm summary judgment because
Appellants waived their arguments in this section by failing to include citations to
the record or cite to any authorities in their brief. 9 See Brief of Appellants, pp. 33-
36; see Tex. R. App. P. 38.1(i); see In re ADA, 287 S.W.3d at 390. Several of
Appellants “statements” in their brief regarding the alleged “facts” are not
contained in the record. See, e.g., Brief of Appellants, p. 35.
8
In Kuemmel, a three year old boy was injured at a hot-rod event when a racing car
left the track, crashed through a protective barrier, and struck the child. Kuemmel,
239 S.W.2d at 870. The jury found that the defendant was negligent because the
barrier fence was not reasonably strong enough and did not conform with barriers
customarily used at hot-rod races. Id. at 871. On appeal, the defendant urged that
the parents’ negligence was the sole proximate cause of the child’s injury. Id. at
873. The Texas Supreme Court rejected the defendant’s argument because the law
forbade imputing a parent’s negligence to a child. Id. The Supreme Court held that
even if the parents were negligent by positioning the child next to the barrier, the
parents’ negligence could not be imputed to the child to find that the child was the
sole proximate cause of his own injuries. Id. at 873-74.
9
Appellants argued before the trial court that the sole-proximate cause in legal
malpractice claims had only been applied in the context of underlying criminal
matters. (CR 226). Appellants waived this argument by failing to include it in their
brief. See Tex. R. App. P. 38.1(i). Tracy Appellees also disproved this argument
by citing to Hamlin v. Gutermuth, 909 S.W.2d 114 (Tex.Civ.App. [14th Dist.]
Houston, 1995) in their motion for summary judgment. (CR 198).
Appellees Brief of E. Todd Tracy and The Tracy Firm 33
REPLY TO ISSUES 3 & 4: The Trial Court Properly Granted Summary
Judgment because the Kemper Release Negated the Damages/Injury Elements
of Appellants’ Legal Malpractice and Breach of Fiduciary Duty Claims
Appellants waived their arguments in this section by failing to include
citations to the record or cite to any authorities in their brief. See Brief of
Appellants, pp. 33-36; see Tex. R. App. P. 38.1(i); see In re ADA, 287 S.W.3d at
390. However, even if the Court were to consider Appellants’ arguments,
summary judgment was properly granted.10
Appellants asserted that the Tracy Appellees’ alleged legal malpractice and
breach of fiduciary duty injured Appellants because they could not recover against
RLI’s umbrella policy. (CR 15-16). When the claim is that lawyers improperly
represented plaintiffs in another case, the plaintiffs must prove and obtain findings
as to the amount of damages that would have been recoverable and collectible in
the other case had been properly prosecuted. (CR 4th Supp. 17); see Cosgrove v.
Grimes, 774 S.W.2d 662, 666 (Tex. 1989).
The Tracy Appellees moved for summary judgment because it was
undisputed that Appellants own release of all claims against George Fitts proved
that Appellants could not have recovered or collected anything from RLI in the
10
Tracy Appellees moved for summary judgment on the damages element of
Appellants’ legal malpractice claim and breach of fiduciary duty claim in one
section of their motion. (CR 4th Supp. 17-19). Tracy Appellees respond to
Appellants issues numbered 3 and 4 together, to refrain from duplicating
arguments and authorities to Appellants’ issues 3 & 4.
Appellees Brief of E. Todd Tracy and The Tracy Firm 34
underlying lawsuit. (CR 4th Supp. 18). The release of any and all claims against
George Fitts released the potential to recover anything from RLI. (CR 2d Supp. 8-
9; CR 4th Supp. 17-19) Appellants even admitted this to the trial court in
paragraph 30 of their summary judgment response. (CR 224).
By releasing their claims against George and Mary Fitts, Appellants created
an absolute bar against the Tracy Appellees from bringing future claims against
George Fitts. (CR 4th Supp. 17-19). According to the plain language of the
Kemper release, Appellants had forever discharged George and Mary Fitts from
any further obligation to pay Appellants for anything related to the November 6,
2009 accident. (CR 2d Supp. 8-9). Appellants signed the Kemper release, without
the knowledge or counsel of the Tracey Appellees, just eight days after the Tracy
Appellees had filed an original petition in Harrison County against Toyota for a
defect in the car. (CR 4th Supp. 19, 31-33, 36-38, 44, 55-58).
Whatever recommendations the Tracy Appellees might have proposed as the
Underlying Lawsuit developed vis-à-vis George’s estate were permanently
foreclosed once Appellants signed the Kemper release. (CR 4th Supp. 19).
Appellants own acts made it impossible for the Tracy Appellees to take the actions
Appellants complain of in this lawsuit. (CR 4th Supp. 19).
Moreover, because of the Kemper release, had the Tracy Appellees sued
George Fitts, Plaintiffs would have been in exactly the same position back then
Appellees Brief of E. Todd Tracy and The Tracy Firm 35
that they are in today – $250,000 in their pocket from Kemper’s policy and facing
a summary judgment (filed by George’s lawyers) arguing release. (CR 4th Supp.
19). Thus, Appellants are in no different position today, which is the quintessential
definition of a party that has not suffered any harm. (CR 4th Supp. 19). As such,
the trial court properly granted summary judgment and dismissed all of Appellants’
claims with prejudice. (CR 281).
PRAYER
For all of the above cited reasons, the Appellants have failed to present a
basis to set aside the trial court’s summary judgment. The trial court properly
granted E. Todd Tracy and The Tracy Firm’s traditional motion for summary
judgment, and the order dismissing all of Appellants’ claims with prejudice should
be affirmed. Likewise, Appellants have waived any issues on appeal by failing to
comply with their briefing requirements before this Court and failing to challenge a
ground upon which the trial court granted summary judgment.
For the reasons stated in this brief, Appellees E. Todd Tracy and The Tracy
Firm ask the Court to:
(i) dismiss this appeal for Appellants’ failure to comply with their
briefing requirements;
(ii) dismiss this appeal for Appellants’ failure to challenge a ground upon
which the trial court granted summary judgment; and
Appellees Brief of E. Todd Tracy and The Tracy Firm 36
(iii) affirm the trial court’s December 1, 2014 order granting E. Todd
Tracy and The Tracy Firm’s Traditional Motion for Summary
Judgment – Release and dismissing all of Appellants’ claims with
prejudice.
Respectfully Submitted,
/s/ Bruce A. Campbell
/s/ Lindsay McNutt
BRUCE A. CAMPBELL
TEXAS BAR NO. 03694500
LINDSAY MCNUTT
TEXAS BAR NO. 24058823
CAMPBELL & ASSOCIATES LAW FIRM, P.C.
4201 Spring Valley Rd., Suite 1250
Dallas, Texas 75244
Telephone: (972) 277-8585
Facsimile: (972) 277-8586
Email: bcampell@cllegal.com
Email: lmcnutt@cllegal.com
ATTORNEYS FOR APPELLEES
E. TODD TRACY and THE TRACY FIRM
Appellees Brief of E. Todd Tracy and The Tracy Firm 37
CERTIFICATE OF COMPLIANCE
Pursuant to Texas Rule of Appellate Procedure 9.4(i), the enclosed brief of
the Tracy Appellees uses a size 14-point font and contains approximately 9,081
words, which is less than the total words of 15,000 permitted by the rule. Counsel
relies on the word count of the computer program used to prepare this brief.
_/s/ Lindsay McNutt _________________
On Behalf of Campbell &Associates Law
Firm, P.C.
Appellees Brief of E. Todd Tracy and The Tracy Firm 38
CERTIFICATE OF SERVICE
The undersigned hereby certifies that a true and correct copy of this
document was served pursuant to the Texas Rules of Civil Procedure on August 7,
2015, as follows:
Lindsey Rames Certified mail, return receipt requested
RAMES LAW FIRM Personal delivery / Hand Delivery
Attorney for Plaintiffs Private delivery / FedEx
5661 Mariner Drive Facsimile transfer
Dallas, Texas 75237 First Class Mail
Attorneys for Appellants E-filing
Carter Hampton Certified mail, return receipt requested
Hampton & Associates Personal delivery / Hand Delivery
Attorney for Plaintiffs Private delivery / FedEx
1000 Houston Street Facsimile transfer
Fort Worth, Texas 76102 First Class Mail
Attorneys for Appellants E-filing
Wade Crosnoe
Shawn Phelan Certified mail, return receipt requested
THOMPSON COE Personal delivery / Hand Delivery
700 North Pearl Street, Suite 2500 Private delivery / FedEx
Dallas, Texas 75201 Facsimile transfer
Attorneys for Smith Appellees First Class Mail
E-filing
_/s/ Lindsay McNutt _________________
On Behalf of Campbell &Associates Law
Firm, P.C.
Appellees Brief of E. Todd Tracy and The Tracy Firm 39