M.B. "Benny" Daneshjou, Individually and as the Representative of Daneshjou Company, Inc. v. Robert H. Bateman and Bateman/Pugh, PLLC

Affirmed and Plurality Opinion and Concurring Opinions filed January 17,
2013.
In The
Fourteenth Court of Appeals
NO. 14-11-00804-CV
M.B. "BENNY" DANESHJOU, INDIVIDUALLY AND AS THE
REPRESENTATIVE OF DANESHJOU COMPANY, INC., Appellant
V.
ROBERT H. BATEMAN AND BATEMAN/PUGH, PLLC, Appellees
On Appeal from the 129th District Court
Harris County, Texas
Trial Court Cause No. 2009-49701
CONCURRING OPINION
Because I believe that the plurality opinion relies too heavily on dicta from
the Texas Supreme Court’s opinion in Keck, Mahin & Cate v. National Union Fire
Insurance Co., 20 S.W.3d 692, 703 (Tex. 2000), and thereby applies an improper
measure of damages, but otherwise reaches the correct disposition in this case, I
respectfully concur.
In Keck, an excess insurance carrier sued the primary insurance carrier, as
well as defense counsel in an underlying litigation, for negligence which allegedly
caused the excess carrier to pay an amount that was higher than a pretrial demand
to settle a case against the insured. Id. at 695. The primary issues in the appeal
involved the scope and validity of a release agreement as well as certain issues
relating to equitable subrogation. Id. at 696-703. The parties apparently agreed
that the settlement was for an excessive amount; they disagreed merely as to whose
fault caused the excessive settlement. Id. at 703.
In remanding for a new trial, the Texas Supreme Court advised that to be
entitled to any damages, the excess carrier would have to prove that the amount it
paid to settle the case was “excessive in the abstract, yet reasonable under these
circumstances because of the defense provided.” Id. The court went on to explain,
If the value of the case with a competent defense would have equaled
or exceeded [the settlement amount], then [the excess carrier] suffered
no harm regardless of whether [the primary carrier or defense counsel]
mishandled the insured’s defense. Even if [the excess carrier] can
prove that its settlement was excessive, it must also prove that [the
primary carrier or defense counsel] mishandled the defense and that a
judgment for [the underlying plaintiff] in excess of the case’s true
value would have resulted from [the] malpractice. [The excess
carrier]’s entitlement to damages will thus depend on proof that the
true value of [the underlying] claim was less than [the settlement
amount] but that [the] malpractice inflated its value. Assuming such
proof, [the excess carrier] may then recover as damages the difference
between the true and inflated value less any amount saved by the
settlement.
Id. The Keck court further defined “true value” in that case 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.1
1
While the court’s opening sentence in the quoted passage (“excessive in the abstract . .
.”) could be interpreted as suggesting that a proper analysis might compare a settlement
following malpractice-free representation and a settlement following malpractice-marred
2
Although the issue addressed in this passage was not squarely before it, the Keck
court was providing direction to the trial court in the event of a trial on remand.
The case presently before us, however, is distinguishable on its facts from
Keck. Here, it is the defendant in the original action, Daneshjou, rather than an
equitable subrogee as in Keck, who brings the legal malpractice action. More
importantly, instead of settlement occurring prior to a verdict in the underlying
action, as occurred in Keck, here, the parties to the underlying action settled after
the jury had reached its verdict.2 Although the reasoning employed in Keck may
be of some benefit, the fact situations in the two cases are too dissimilar for Keck
to fully govern our analysis. Nothing in the Keck opinion can be read as
pronouncing a broadly applicable rule for damages in malpractice actions; to the
contrary, it appears to contain case-specific instructions for remand in that
particular case.
Under the facts and evidence presented in this case, where Bateman was
found to have committed malpractice in the trial and a settlement occurred after a
verdict was reached in the underlying action, the proper measure of damages
would be to ascertain the difference between the value of the settlement which
occurred and the value of a settlement had Bateman not negligently handled the
defense. See Haynes & Boone v. Bowser Bouldin, Ltd., 864 S.W.2d 662, 672 (Tex.
App.—San Antonio 1993), rev’d in part on other grounds, 896 S.W.2d 179 (Tex.
1995); Heath v. Herron, 732 S.W.2d 748, 753 (Tex. App.—Houston [14th Dist.]
1987, writ denied); State Bar of Tex., Texas Pattern Jury Charges—Malpractice
representation, the court ultimately concludes that the “true value” of the case is what a final
judgment would have contained after trial and that any savings due to settlement should be
simply subtracted from the malpractice plaintiff’s recovery. Keck, 20 S.W.3d at 703. The court,
however, does not explain why this should be so.
2
It is also noteworthy in this case that there is limited evidence regarding why the
settlement reached was such a deep discount from the amount awarded by the jury.
3
PJC 84.3, cmt. (2010). Simply stating the value of the underlying lawsuit as the
$8.2 million jury verdict in the underlying case and crediting Bateman with the
entire difference between that verdict and the amount of the settlement, as the
plurality suggests should be done, would not measure the impact Bateman’s
malpractice had on the amount of settlement (i.e., did the malpractice increase the
amount of the settlement above what it would have been absent any malpractice?).
The true measure of Daneshjou’s damages is how much more he had to pay (if
any) due to Bateman’s malpractice.3 Comparing the settlement to the underlying
jury verdict does not determine the degree to which Daneshjou was actually
damaged by Bateman’s malpractice.4
Although I disagree with the plurality’s analysis on this issue, I cannot
disagree with the disposition for three reasons. First, I agree that Daneshjou’s
argument that the jury found Daneshjou was damaged by Bateman in the amount
of $300,000 is not a correct reading of the verdict. As the plurality properly
emphasizes, the jury was asked to determine “[t]he amount of damages, if any,
assessed against Daneshjou in the underlying lawsuit caused by the failure of
Bateman to properly defend the lawsuit.” The jury should have been asked to
measure the difference between the value of the settlement which occurred and the
value of a settlement had Bateman not negligently handled the defense. Second,
Daneshjou did not object to the charge submitted to the jury, so he cannot now
complain that it was an improperly formulated charge. See, e.g., Small v.
3
There is no reason to discuss in this concurring opinion the apparent fact that Daneshjou
did not himself fund the settlement.
4
The plurality’s methodology, deducting the underlying settlement amount from the
amount a jury finds was caused by an attorney’s malpractice in the underlying litigation, also
could discourage settlement in cases where a defendant believed he or she had been negligently
represented. It is the policy of this state to encourage settlement of lawsuits. See, e.g., Tex. Civ.
Prac. & Rem. Code § 154.002.
4
McMaster, 352 S.W.3d 280, 282 n.1 (Tex. App.—Houston [14th Dist.] 2011, pet.
denied). Third, as the plurality also properly explains, Daneshjou did not bring
forward a reporter’s record containing the evidence adduced at trial; consequently,
we cannot assess whether the trial court properly rendered a take nothing
judgment, even had it applied a proper measure of damages in this case. See
Bennett v. Cochran, 96 S.W.3d 227, 229 (Tex. 2002) (per curiam).
Accordingly, I concur in the result reached in the plurality.
/s/ Martha Hill Jamison
Justice
Panel consists of Justices Frost, Christopher, and Jamison (Christopher, J.,
plurality) (Frost, J., concurring).
5