Nalle Plastics Family Limited Partnership v. Porter, Rogers, Dahlman & Gordon, P.C. and Patrick P. Rogers

NUMBER 13-11-00525-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI – EDINBURG
NALLE PLASTICS FAMILY Appellant,
LIMITED PARTNERSHIP,
v.
PORTER, ROGERS, DAHLMAN
& GORDON, P.C. AND
PATRICK P. ROGERS, Appellees.
On appeal from the County Court at Law No. 2
of Nueces County, Texas.
MEMORANDUM OPINION
Before Justices Rodriguez, Garza and Perkes
Memorandum Opinion by Justice Garza
Appellant, Nalle Plastics Family Limited Partnership (“Nalle”), appeals the trial
court’s venue ruling and its judgment in favor of appellees, Porter, Rogers, Dahlman &
Gordon, P.C. (“Porter”), a law firm, and one of Porter’s partners, Patrick P. Rogers. By
five issues, which we construe as three, Nalle contends that the Nueces County trial
court erred by (1) failing to transfer the case to Travis County, (2) rendering summary
judgment dismissing all counterclaims brought by Nalle against Porter, and (3) awarding
damages and attorney’s fees to Porter. By cross-appeal, Porter challenges the trial
court’s award of attorney’s fees. We affirm in part, reverse in part, and remand for
further proceedings.
I. BACKGROUND
Nalle is a Texas limited partnership that owns certain real property in downtown
Austin, Texas. In 1991, Nalle’s predecessors entered into a long-term commercial
lease agreement regarding the subject property. In subsequent years, the
predecessor’s interest as lessor was transferred to Nalle and the lessee’s interest was
transferred to Cypress Industrial L.P. (“Cypress”).
Around 2005, a dispute arose between Nalle and Cypress regarding the extent to
which Cypress’s sub-lessees1 were free to remodel buildings on the property. In
particular, Nalle believed that the 1991 lease agreement prohibited any lessees or sub-
lessees from demolishing, damaging, or destroying any existing improvement on the
premises. Cypress, on the other hand, interpreted the lease agreement to permit
modifications to the property without Nalle’s approval.2
Nalle hired Rogers for legal representation in its dispute with Cypress. Nalle and
1
The sub-lessees of the property at issue include the Austin Children’s Museum, Compass
Learning, and a parking lot operator. The sub-lessees pay rent to Cypress, and Cypress pays rent to
Nalle under the terms of the 1991 lease.
2
Porter contends that the rent amount specified in the 1991 lease was far less than the market
allowed and Cypress therefore enjoyed a large rent differential as a result of this arrangement. According
to Porter, Nalle’s primary intent in asserting a restrictive interpretation of the 1991 lease was to gain
leverage in its efforts to increase the rent amounts payable to it by Cypress.
2
Rogers did not execute a written contract defining the scope of representation or the fee
amount. At the outset of the representation, Rogers performed research and wrote a
letter to Cypress’s counsel reiterating Nalle’s position regarding the lease restrictions.
Cypress again expressed its rejection of that position.
Rogers then prepared a “Memorandum Concerning Lessor’s Interpretation of
Lease” (the “Memorandum”), which set forth Nalle’s position regarding the lease. The
parties dispute who initially suggested that the Memorandum be prepared and filed as a
public record; however, it is undisputed that Rogers prepared the Memorandum and
advised that it be filed, and it is undisputed that Nalle reviewed and signed the
Memorandum and approved its filing pursuant to Rogers’s advice. The Memorandum,
which refers to the 1991 lease, states in relevant part:
The purpose of this Memorandum is to set forth of record the Lessors’
interpretation of the term “structural component”, as well as,
“improvement(s)” as applied and used in Paragraphs 4.3 and 8.4 of the
Lease.
Paragraph 4.3 of the Lease provides “Lessee further and [sic] represents
that Lessee will not demolish, damage, or destroy any portion of existing
improvements on the Premises and that no excavation, boring, or
disturbance of the subsurface will be made on the Premises.”
Paragraph 8.4 of the Lease states, in part, as follows: “Lessee, at
Lessee’s cost and expense, may make modifications to improvements on
the Premises which do not require excavation or disturbance of the
subsurface, due to possible contamination of the subsurface, and which
do not alter any structural component of any improvement on the
Premises.”
....
It is the Lessor’s interpretation that Paragraph 4.3, when read in context of
the Lease, means that the Lessee or any party dealing with the leasehold
premises under the Lease cannot demolish, damage, or destroy any
portion of existing improvements on the Premises.
3
....
It is the Lessor’s interpretation that Paragraph 8.4, when read in context of
the Lease, means any leasehold alterations or modifications that involve
an alteration of “any structural component of any improvement on the
premises” cannot be done under the Lease without approval of the Lessor.
It is the Lessors’ interpretation that the term “structural component”
includes all parts of the existing improvements, each of which has its own
structural components. Thus, per the interpretation of the Lessor, any
alteration of any leasehold improvements on the Premises would require
Lessors’ prior approval as each such improvement has its own structural
components.
Rogers filed the Memorandum in the public records of Travis County on February 6,
2006.
With Nalle’s restrictive interpretation of the lease a matter of public record,
Cypress found it increasingly difficult to attract new sub-lessees. Cypress responded by
filing suit against Nalle in Travis County. In the suit, Cypress sought a declaratory
judgment that it and its sub-lessees are “entitled to modify the interior of the leased
premises” and that the Memorandum is “of no force or effect.” Nalle counterclaimed for
a contrary declaration. Later, Nalle added an allegation that, due to certain infractions,
Cypress was in default of the lease and the lease was therefore terminated. 3 In
particular, Nalle contended that Cypress violated Austin ordinances by placing parking
operations in the city’s right-of-way and that it violated state law by performing an
excavation in the city’s right-of-way without a permit.4 In an effort to document the
infractions, Rogers and Nalle’s president Alan W. Nalle5 repeatedly entered the property
3
The 1991 lease provided that termination of the lease was one of the remedies available to
Nalle should Cypress default.
4
Nalle noted that the 1991 lease agreement obliged Cypress to comply with all local, state, and
federal laws and that failure to do so is deemed an event of default.
5
More precisely, Alan W. Nalle is the president of Nalle Plastics, L.L.C., which is the general
partner of Nalle.
4
to take photographs. Cypress replied by adding allegations that Nalle tortiously
interfered with Cypress’s contracts and prospective business relations, breached the
lease agreement, and breached the covenant of quiet enjoyment. Cypress alleged that,
as the result of Nalle’s actions, the value of its leasehold interest was diminished by
nearly $3 million.
Nalle and Cypress participated in mediation. Although negotiations through
counsel proved fruitless, a private conference between the principal officers of the
companies—unrepresented by counsel—and the mediator resulted in an oral
framework of an agreement. Rogers and The Lee Firm, P.C. (“Lee”) were hired by
Nalle to reduce the agreement to writing. They did so, and a written settlement
agreement was filed in the underlying lawsuit. Under the agreement, Cypress agreed to
pay as much as $900,000 in additional rent over the life of the lease. In exchange,
Nalle agreed to withdraw the Memorandum, accept Cypress’s interpretation of the
lease, and drop its lease termination claim.
When Porter and Lee billed Nalle for the work done on the case, Nalle refused to
pay, claiming that the law firms had offered inadequate representation and bad advice.
In order to collect the fees, the law firms filed suit against Nalle in Nueces County for
breach of contract and quantum meruit. Nalle moved to transfer the case to Travis
County, but the trial court denied the motion on May 20, 2009. Nalle then asserted
counterclaims against Porter and Lee for professional negligence. The claims were
based primarily on three acts and omissions by Rogers which it alleged constituted legal
malpractice: (1) filing the Memorandum in Travis County public records; (2) failing to file
a forcible detainer action in justice court to evict Cypress after Cypress allegedly
5
defaulted on the lease; and (3) physically entering the subject property to document the
alleged lease infractions, which Nalle asserted led to Cypress’s quiet enjoyment claim.
Nalle also brought counterclaims for breach of fiduciary duty and fraudulent inducement.
Porter moved for traditional and no-evidence summary judgment on Nalle’s
counterclaims. It later filed a second motion for summary judgment, also asserting
traditional and no-evidence grounds. In a series of orders, the trial court excluded
portions of Nalle’s summary judgment evidence and granted summary judgment
dismissing all of Nalle’s counterclaims.
The case proceeded to trial on the law firms’ claims for unpaid attorney’s fees.
The jury found in favor of the law firms and the trial court rendered judgment awarding
Porter $132,661 in damages plus $150,000 in attorney’s fees and pre- and post-
judgment interest.6 This appeal followed.
II. DISCUSSION
A. Venue
By its first issue, Nalle argues the trial court erred in denying its motion to transfer
its claims against Porter to Travis County.
1. Applicable Law and Standard of Review
In general, plaintiffs are allowed to choose venue first, and the plaintiff’s choice
cannot be disturbed as long as suit is initially filed in a county of proper venue. Henry v.
McMichael, 274 S.W.3d 185, 190 (Tex. App.—Houston [1st Dist.] 2008, pet. denied);
Crown Cent. LLC v. Anderson, 239 S.W.3d 385, 388 (Tex. App.—Beaumont 2007, pet.
denied). In a suit in which there is more than one plaintiff, each plaintiff must,
6
The final judgment also awarded $45,625.65 in damages to Lee, plus $50,000 in attorney’s fees
and pre- and post-judgment interest. After filing its appeal, Nalle settled its claims with Lee. Lee is not a
party to this appeal.
6
independently of every other plaintiff, establish proper venue. TEX. CIV. PRAC. & REM.
CODE ANN. § 15.003(a) (West Supp. 2011). “Proper venue” means: (1) the mandatory
venue as provided by statute; or (2) if there is no mandatory venue, the venue provided
under the general venue statute or the permissive venue provisions of subchapter C of
chapter 15 of the civil practice and remedies code.
The general venue statute states that all lawsuits shall be brought:
(1) in the county in which all or a substantial part of the events or
omissions giving rise to the claim occurred;
(2) in the county of defendant’s residence at the time the cause of
action accrued if defendant is a natural person;
(3) in the county of the defendant’s principal office in this state, if the
defendant is not a natural person; or
(4) if Subdivisions (1), (2), and (3) do not apply, in the county in which
the plaintiff resided at the time of the accrual of the cause of action.
Id. § 15.002(a) (West 2002). Venue may be proper in more than one county under the
general, mandatory or permissive venue rules. See GeoChem Tech Corp. v.
Verseckes, 962 S.W.2d 541, 544 (Tex. 1998).
A plaintiff’s choice of venue stands unless challenged by a proper motion to
transfer venue. In re Mo. Pac. R.R. Co., 998 S.W.2d 212, 216 (Tex. 1999); Chiriboga v.
State Farm Mut. Auto. Ins. Co., 96 S.W.3d 673, 678 (Tex. App.—Austin 2003, no pet.).
If venue is properly challenged, the plaintiff has the burden to present prima facie proof
that venue is maintainable in the county of suit. Chiriboga, 96 S.W.3d at 678 (citing In
re Masonite Corp., 997 S.W.2d 194, 197 (Tex. 1999); TEX. R. CIV. P. 87 (2)(a), (3)(a)).
The plaintiff’s prima facie proof is not subject to rebuttal, cross-examination,
impeachment, or disproof. Ruiz v. Conoco, Inc., 868 S.W.2d 752, 757 (Tex. 1993). The
7
action must remain in the county of suit if the plaintiff selected a county of proper venue
and supported the selection with prima facie proof supporting venue there. Chiriboga,
96 S.W.3d at 678. If one plaintiff in a multiple-plaintiff suit cannot independently
establish proper venue, that plaintiff’s part of the suit must be transferred or dismissed
“unless that plaintiff, independently of every other plaintiff,” establishes that:
(1) joinder of that plaintiff or intervention in the suit by that plaintiff is
proper under the Texas Rules of Civil Procedure;
(2) maintaining venue as to that plaintiff in the county of suit does not
unfairly prejudice another party to the suit;
(3) there is an essential need to have that plaintiff’s claim tried in the
county in which the suit is pending; and
(4) the county in which the suit is pending is a fair and convenient
venue for that plaintiff and all persons against whom the suit is
brought.
TEX. CIV. PRAC. & REM. CODE ANN. § 15.003(a).
A trial court’s venue ruling is evaluated by an appellate court “based on an
independent determination from the record and not under either an abuse of discretion
or substantial evidence standard.” Id. § 15.003(c)(1). The trial court’s determination
that venue is proper in a particular county will be upheld on appeal if there is any
probative evidence supporting venue in the county of suit, even if the evidence
preponderates to the contrary. Henry, 274 S.W.3d at 190 (citing Chiriboga, 96 S.W.3d
at 678); see Surgitek v. Abel, 997 S.W.2d 598, 602 (Tex. 1999) (“[I]f the plaintiff offers
prima facie proof through pleadings and affidavits that venue is proper, the inquiry is
over.”). However, conclusive evidence to the contrary can “destroy the probative
evidence.” Chiriboga, 96 S.W.3d at 678 (citing Ruiz, 868 S.W.2d at 757).
8
2. Analysis
We first address Porter’s contention, raised in its appellee’s brief, that Nalle
cannot now complain about the trial court’s venue ruling because that ruling was subject
to immediate interlocutory appeal, which Nalle did not pursue. Porter notes that an
interlocutory appeal is available for venue rulings in cases involving multiple plaintiffs,
see TEX. CIV. PRAC. & REM. CODE ANN. § 15.003(b),7 and it contends that, where an
interlocutory appeal is authorized, that generally serves as the exclusive appellate
remedy and review after a trial on the merits is barred. Porter cites several instances
where courts have held, in other contexts, that the availability of an immediate
interlocutory appeal precludes post-trial review. See, e.g., Matis v. Golden, 228 S.W.3d
301, 305 (Tex. App.—Waco 2007, no pet.) (holding that an order denying special
appearance is reviewable by interlocutory appeal only); Long v. Spencer, 137 S.W.3d
923, 926 (Tex. App.—Dallas 2004, no pet.) (same for order appointing receivers);
Bayoud v. Bayoud, 797 S.W.2d 304, 313 (Tex. App.—Dallas 1990, writ denied) (same
for preliminary injunction order).
In Hernandez v. Ebrom, the Texas Supreme Court considered a similar issue in
the medical negligence context. 289 S.W.3d 316, 318–20 (Tex. 2009). In that case, the
7
Subsection 15.003(b) allows an interlocutory appeal of a trial court’s determination that (1) a
plaintiff did or did not independently establish proper venue, or (2) a plaintiff that did not independently
establish proper venue did not establish the four requirements specified in subsection (a). TEX. CIV.
PRAC. & REM. CODE ANN. § 15.003(b) (West Supp. 2011). This is an exception to the general rule, stated
in section 15.064, that “[n]o interlocutory appeal shall lie from the determination [of venue questions].” Id.
§ 15.064 (West 2002). Other appellate courts have concluded, and we have agreed, that interlocutory
appeals are available under subsection 15.003(b) for any venue determination in a case involving multiple
plaintiffs. See Crown Cent. LLC v. Anderson, 239 S.W.3d 385, 388 (Tex. App.—Beaumont 2007, pet.
denied); see also Shamoun & Norman, LLP v. Yarto Int’l Group, LP, Nos. 13-11-00087-CV, 13-11-00256-
CV & 13-11-00281-CV, 2012 Tex. App. LEXIS 4384, at *26–33 (Tex. App.—Corpus Christi May 31, 2012,
pet. filed) (mem. op. on reh’g); Thomas v. Hoelke, No. 04-09-00771-CV, 2010 Tex. App. LEXIS 4501, at
*4–5 (Tex. App.—San Antonio June 16, 2010, no pet.) (mem. op.); Siemens Corp. v. Bartek, No. 03-04-
00613-CV, 2006 Tex. App. LEXIS 3533, at *11 (Tex. App.—Austin Apr. 28, 2006, no pet.) (mem. op.);
Sw. Bell Tel. Co. v. Superior Payphones, Ltd., No. 13-05-00661-CV, 2006 Tex. App. LEXIS 1502, at *7
(Tex. App.—Corpus Christi Feb. 23, 2006, pet. dism’d by agr.) (mem. op.).
9
Court considered a statutory provision providing that a person “may” appeal an
interlocutory order denying a motion to dismiss on the basis that the plaintiff failed to file
a medical expert report. Id. at 318 (citing TEX. CIV. PRAC. & REM. CODE ANN. §
51.014(a)(9) (West Supp. 2011)). The Court rejected the appellee’s contention that the
availability of an interlocutory appeal precluded review after trial on the merits. Id. at
318–20. The Court stated that “[u]nambiguous statutory language is interpreted
according to its plain language unless such an interpretation would lead to absurd
results,” id. at 318 (citing Fleming Foods of Tex., Inc. v. Rylander, 6 S.W.3d 278, 284
(Tex. 1999)), and it noted that, according to the Code Construction Act, the word “may”
“creates discretionary authority or grants permission or a power.” Id. (citing TEX. GOV’T
CODE ANN. § 311.016(1) (West 2005)). The Court therefore concluded that an
interlocutory appeal was not mandatory. Id. at 319–20.8
Here, the statute authorizing the interlocutory appeal of a venue ruling—section
15.003(b) of the civil practice and remedies code—also uses the word “may.” See TEX.
CIV. PRAC. & REM. CODE ANN. § 15.003(b) (“An interlocutory appeal may be taken of a
8
The Hernandez Court suggested, however, that if a defendant failed to pursue the available
interlocutory appeal under section 74.351 for denial of a motion to dismiss, and the plaintiff then prevailed
at trial, the statute would not allow the defendant to challenge the denial of the motion after trial.
Hernandez v. Ebrom, 289 S.W.3d 316, 320–21 (Tex. 2009). The Court noted that “a statute will not be
construed to yield an absurd result,” and it found that post-trial dismissal of a claim for failure to timely file
a medical expert report would be “unjust and nonsensical” where the merits of the claim had since been
proven at trial. Id. at 321 (citing City of Rockwall v. Hughes, 246 S.W.3d 621, 625 (Tex. 2008)). The
Court reasoned that “by requiring timely expert reports, the Legislature intended to reduce frivolous
claims” and that “[i]f a full trial occurs and the plaintiff prevails . . . , then the claim could not sensibly be
classified as frivolous.” Id. We note that this rationale does not apply in the context of pre-trial venue
rulings. Even if a plaintiff eventually prevails on the merits at trial, as here, there is nothing inherent in
that fact that would render the pre-trial venue ruling moot or unreviewable. In other words, a plaintiff’s
eventual success at trial sheds no light on the relative merits of the defendant’s pre-trial motion to transfer
venue. Moreover, the intent of the Legislature in enacting the venue statute was not to reduce frivolous
claims; rather, it was to ensure that lawsuits are brought and tried in an appropriate forum. Therefore, it
would not offend the purpose of the statute—nor would it be “unjust” or “nonsensical,” see id.—to allow a
losing defendant to challenge the pre-trial venue ruling on final appeal.
10
trial court’s determination under Subsection (a) . . .”). The plain language of the statute,
therefore, suggests that review of a pre-trial venue ruling is available on final appeal.
On the other hand, transferring a case to a different forum for a new trial—after full trial
proceedings have been completed in the initial forum—may well be considered an
“absurd result” that the Legislature could not have intended. See Hernandez, 289
S.W.3d at 318 (citing Rylander, 6 S.W.3d at 284).
Assuming, but not deciding, that a venue ruling for which an interlocutory appeal
was available but untaken may be challenged on final appeal, we nevertheless
conclude that the trial court did not abuse its discretion by denying Nalle’s motion to
transfer venue. In its response to Nalle’s motion to transfer venue, Porter claimed that
Nueces County was a proper venue for its suit because “all or a substantial part of the
events or omissions giving rise to the claim occurred” there. See TEX. CIV. PRAC. &
REM. CODE ANN. § 15.002(a)(1). In support of that claim, Porter submitted affidavits by
Rogers and Michael S. Lee of The Lee Firm.9 Rogers stated in his affidavit that the
parties “discussed and understood” the fact that, although Porter has a “branch office” in
Austin, its “principal administrative office” is in Corpus Christi. He further stated that
Nalle:
understood and agreed that some of the necessary work reasonably may
be performed out of the [Porter] office in Corpus Christi, Texas; all [Porter]
invoices would be issued out of the Corpus Christi, Nueces County, Texas
office and that all fees and expense reimbursements due to [Porter] by
Nalle were payable to [Porter] at its Corpus Christi principal office.
9
Much of Lee’s and Rogers’ affidavits was devoted to establishing that proper venue for Lee’s
claims lies in Nueces County. We do not consider those portions of the affidavits in this analysis because
our initial task is to determine only whether Porter, “independently of every other plaintiff, establish[ed]
proper venue.” See TEX. CIV. PRAC. & REM. CODE ANN. § 15.003(a). Whether Lee’s suit was properly
brought in Nueces County is irrelevant to this determination.
11
Rogers noted that the amount due from Nalle included over $30,000 in “expenses
advanced by [Porter] for Nalle’s benefit” in connection with the Cypress litigation, and he
averred that “[b]ased upon the firm’s business operation, substantially all of the third-
party file expenses are and were paid out of [Porter’s] Corpus Christi, Texas office.”
Rogers further stated that “some [Porter] work [on the Cypress litigation] was in fact
performed by [Porter] out of [Porter’s] Corpus Christi, Texas office” and that Nalle was
required to pay all invoices in Nueces County. Rogers concluded that “[t]he cause of
action therefore, for the invoices, arises and/or substantially arises in whole or in part in
Nueces County, Texas as that is the county in which the invoices were prepared and
per agreement, where the invoices would be paid by Nalle.”10
Porter’s evidence was sufficient to establish a prima facie case that venue was
proper in Nueces County. As noted, Rogers averred that “some” work on the Cypress
case was done by Porter attorneys in its Nueces County office. He also noted that
much of the third-party expenses involved with litigating the Cypress case were paid out
of that office. This testimony was probative evidence supporting venue in the county of
suit and was not subject to rebuttal, cross-examination, impeachment, or disproof. See
Henry, 274 S.W.3d at 190; Ruiz, 868 S.W.2d at 757. In light of this testimony, we
cannot say that the trial court erred in determining that all or a substantial part of the
10
Rogers additionally stated in his affidavit that, regardless of whether Nueces County is a proper
venue under the general venue statute, Nalle’s motion to transfer should be denied because the criteria
listed in subsection 15.003(a) were satisfied. See id. § 15.003(a)(1)–(4). In particular, Rogers averred
that: (1) Porter’s claims were properly joined with Lee’s claims, see TEX. R. CIV. P. 40; (2) maintaining
venue of Porter’s claims in Nueces County would not unfairly prejudice Nalle because “the Nueces
County courts provide reasonable, fair, impartial and just jurisprudence of cases”; (3) it is “essential and
indispensable that the [Porter] claim be tried concurrently and jointly with [Lee’s] claim”; and (4) Nueces
County is a fair and convenient venue for Nalle “as the distance from Austin to Corpus Christi is only 200
miles” and “Mr. Nalle has traveled to Corpus Christi many times for several social visits.” We need not
address these contentions because of our conclusion herein that Porter’s evidence established that
Nueces County is a proper venue under the general venue statute. See TEX. R. APP. P. 47.1.
12
events or omissions giving rise to the claim occurred in Nueces County. The trial court
therefore did not err in denying Nalle’s motion to transfer. Nalle’s first issue is
overruled.
B. Summary Judgments on Nalle’s Counterclaims
By its second issue, Nalle contends that the trial court erred in granting motions
for summary judgment filed by Porter with regard to Nalle’s counterclaims.
Nalle’s live pleading contained claims against Porter for professional negligence,
breach of fiduciary duty, and fraud. Porter’s initial motion for summary judgment, filed
on October 22, 2009, asserted traditional and no-evidence grounds. After ruling that
portions of Porter’s summary judgment evidence were inadmissible, the trial court
granted Porter’s initial summary judgment motion in part and denied it in part on July 1,
2010. In particular, the trial court granted the motion with respect to Nalle’s
counterclaims asserting that Porter was professionally negligent by: (1) “[f]ailing to file
an appropriate forcible detainer action to terminate the lease” (the “forcible detainer
claim”); and (2) “[f]ailing to advise Nalle that the filing of the Memorandum would result
in the filing of a declaratory action and likely claim for interference, breach of quiet
enjoyment, [and] clouding Cypress’s leasehold . . .” (the “failure-to-advise claim”).
However, the trial court denied Porter’s initial motion for summary judgment with respect
to Nalle’s counterclaims asserting that Porter was professionally negligent by: (1)
advising Nalle to file the Memorandum in the public records of Travis County (the
“Memorandum claim”); and (2) “[a]dvising Nalle to enter onto the lease property to take
13
over 3,000 photographs, and thereby giving Cypress grounds for its breach of
contract . . . claims” (the “photography claim”).11
Porter filed a second motion for summary judgment on October 8, 2010. This
second motion asserted that new evidence established Porter’s right to summary
judgment on the following counterclaims brought by Nalle: (1) the Memorandum claim;
(2) the photography claim; (3) the claim for breach of fiduciary duty; and (4) the fraud
claim. The trial court granted this motion in its entirety on December 2, 2010.
We will address summary judgment as to each of Nalle’s counterclaims in turn.12
1. Standard of Review
A motion for summary judgment may be brought on no-evidence or traditional
grounds. See TEX. R. CIV. P. 166a(c), (i). A motion for no-evidence summary judgment
is equivalent to a motion for pretrial directed verdict, and we apply the same legal
sufficiency standard on review. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex.
2006); Ortega v. City Nat’l Bank, 97 S.W.3d 765, 772 (Tex. App.—Corpus Christi 2003,
no pet.) (op. on reh’g). Such a motion should be granted if there is no evidence of at
least one essential element of the claimant’s cause of action. Hamilton v. Wilson, 249
S.W.3d 425, 426 (Tex. 2008) (per curiam). The burden of producing evidence is
entirely on the non-movant; the movant has no burden to attach any evidence to the
11
The trial court’s July 1, 2010 order granted summary judgment in favor of Porter on Nalle’s
photography claim insofar as Nalle alleged that Porter’s actions gave Cypress grounds for quiet
enjoyment and interference claims. In other words, the trial court determined as a matter of law that
Porter’s alleged negligence did not give rise to Cypress’s quiet enjoyment and interference claims; but it
determined that there was at least a fact issue regarding whether such alleged negligence gave rise to
Cypress’s breach of contract claims. The trial court subsequently granted Porter’s second summary
judgment motion in its entirety as to that latter issue.
The July 1, 2010 order denied Porter’s motion for summary judgment on grounds that Nalle’s
counterclaims were barred by limitations.
12
Nalle does not challenge, on appeal, the summary judgment rendered on its breach of fiduciary
duty claim.
14
motion, and if the non-movant produces evidence raising a genuine issue of material
fact, summary judgment is improper. TEX. R. CIV. P. 166a(i). All that is required of the
non-movant is to produce a scintilla of probative evidence to raise a genuine issue of
material fact on the challenged element. Forbes, Inc. v. Granada Biosciences, Inc., 124
S.W.3d 167, 172 (Tex. 2003); Ortega, 97 S.W.3d at 772. “Less than a scintilla of
evidence exists when the evidence is ‘so weak as to do no more than create a mere
surmise or suspicion of a fact.’” Ortega, 97 S.W.3d at 772 (quoting Kindred v.
Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983)); see Forbes, 124 S.W.3d at 172.
Conversely, more than a scintilla of evidence exists when reasonable and fair-minded
individuals could differ in their conclusions. Forbes, 124 S.W.3d at 172; Ortega, 97
S.W.3d at 772 (citing Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 25 (Tex. 1994)). In
determining whether the non-movant has produced more than a scintilla of evidence,
we review the evidence in the light most favorable to the non-movant, crediting such
evidence if reasonable jurors could and disregarding contrary evidence unless
reasonable jurors could not. Tamez, 206 S.W.3d at 582; City of Keller v. Wilson, 168
S.W.3d 802, 825, 827 (Tex. 2005).
We review the trial court’s granting of a traditional motion for summary judgment
de novo. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003);
Branton v. Wood, 100 S.W.3d 645, 646 (Tex. App.—Corpus Christi 2003, no pet.).
When reviewing a traditional summary judgment, we must determine whether the
movant met its burden to establish that no genuine issue of material fact exists and that
the movant is entitled to judgment as a matter of law. TEX. R. CIV. P. 166A(c); Sw. Elec.
Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002). The movant bears the burden of
15
proof, and all doubts about the existence of a genuine issue of material fact are
resolved against the movant. See Sw. Elec. Power Co., 73 S.W.3d at 215. We take as
true all evidence favorable to the non-movant, and we indulge every reasonable
inference and resolve any doubts in the non-movant’s favor. Valence Operating Co. v.
Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).
2. Applicable Law
To establish a legal malpractice claim, a plaintiff must demonstrate that (1) the
attorney owed the plaintiff a duty, (2) the attorney breached that duty, (3) the breach
proximately caused the plaintiff’s injuries, and (4) damages occurred. Belt v.
Oppenheimer, Blend, Harrison & Tate, Inc., 192 S.W.3d 780, 783 (Tex. 2006); Peeler v.
Hughes & Luce, 909 S.W.2d 494, 496 (Tex. 1995); Cosgrove v. Grimes, 774 S.W.2d
662, 664 (Tex. 1989). If a legal malpractice case arises from prior litigation, the plaintiff
must prove that, but for the attorney’s breach of his duty, the plaintiff would have
prevailed in the underlying case. Rangel v. Lapin, 177 S.W.3d 17, 22 (Tex. App.—
Houston [1st Dist.] 2005, pet. denied). This “but-for” causation aspect of the plaintiff’s
burden is known as the “suit-within-a-suit” requirement. Id. In addition, “[t]he plaintiff
must prove and obtain findings as to the amount of damages that would have been
recoverable and collectible if the other case had been properly prosecuted.” Akin,
Gump, Strauss, Hauer & Feld, L.L.P. v. Nat’l Dev. & Research Corp., 299 S.W.3d 106,
112 (Tex. 2009).
The attorney's conduct must be evaluated by the fact-finder based on the
information the attorney had at the time of the alleged act of negligence. Zenith Star
Ins. Co. v. Wilkerson, 150 S.W.3d 525, 530 (Tex. App.—Austin 2004, no pet.). If an
16
attorney makes a decision which a reasonably prudent attorney could make in the same
or similar circumstance, it is not an act of negligence even if the result is undesirable.
Cosgrove, 774 S.W.2d at 665. Attorneys cannot be held strictly liable for all of their
clients’ unfulfilled expectations. Id. An attorney who makes a reasonable decision in
the handling of a case may not be held liable if the decision later proves to be imperfect.
Id. The standard is an objective exercise of professional judgment, not the subjective
belief that his acts are in good faith. Id.
3. Memorandum and Failure-to-Advise Claims
In its live petition at the time of Porter’s summary judgment motions, Nalle
contended that Porter and Rogers committed professional negligence by, among other
things, advising Nalle to record the Memorandum in the public records of Travis County
and failing to advise Nalle that filing the Memorandum would result in Cypress filing a
declaratory judgment action and a “likely claim for interference, breach of quiet
enjoyment, clouding Cypress’s leasehold, scaring off potential sub-tenants and
devaluing the leasehold.” Nalle further asserted that, “[t]o the extent that Rogers claims
that he filed the Memorandum because Nalle wished it, Rogers was negligent because
he did not advise Nalle against filing the Memorandum.”
Porter argued in its first summary judgment motion that it was entitled to
summary judgment on the Memorandum and failure-to-advise claims because: (1) the
Memorandum was justified and privileged; (2) the filing of the Memorandum was not a
proximate cause of injury to Nalle; (3) there was no evidence that Cypress sustained
any damages as a result of the filing of the Memorandum; (4) Nalle’s admissions under
oath negated its claims based on Porter’s advice to settle; (5) Nalle is estopped by
17
various provisions of its settlement agreement with Cypress; (6) Nalle’s agreement to
settle its claims against Cypress was the sole proximate cause of any injury suffered by
Nalle; (7) Nalle cannot show that it would have been successful in its lease termination
claim against Cypress; and (8) Nalle’s claims are barred by limitations. In its second
summary judgment motion, Porter argued that: (1) the Memorandum did not provide
the basis for any claims by Cypress against Nalle; (2) a lis pendens cannot be filed in a
lease interpretation case; (3) Paragraph 11 of the lease authorized the filing of the
Memorandum; (4) Nalle’s claimed damages were speculative and based upon
uncompensable “lost bargaining leverage”; (5) there was no evidence to support the
failure-to-advise claim; (6) there was no evidence that the Memorandum caused
damages to Cypress; (7) there was no evidence that Cypress had a legitimate claim
against Nalle; (8) there was no evidence of proximate cause; and (9) Nalle’s claims are
barred by estoppel.
In response to Porter’s first summary judgment motion, Nalle presented affidavits
from attorneys James Cary Barton and John G. Lione Jr. Barton’s affidavit stated that
he has practiced law in Texas since 1969 and has practiced primarily in the area of
commercial real estate law since 1975. He became board certified in commercial real
estate law in 1995. Barton reviewed documents related to the Cypress controversy and
concluded:
When [Rogers] filed the [Memorandum] on behalf of [Nalle], he exposed
[Nalle] to a claim of placing a cloud on the title of [Cypress]’s leasehold
interest in the Leased Premises because that filing was not privileged. If
[Rogers] had initiated an action for declaratory judgment on behalf of
[Nalle] initially and then recorded the [Memorandum] as a lis pendens, that
recording would have been privileged and would not have exposed [Nalle]
to a claim of having interfered with [Cypress]’s title.
18
Lione, who has been practicing law in Texas since 1974 and was board certified
in commercial real estate law in 1984, also reviewed documents related to the case.
Lione’s affidavit stated:
11. I am familiar with the standard of care of a reasonable and prudent
attorney in handling the type of case, a commercial real estate
dispute which has gone into litigation such as this case currently
before the Court.
12. In my experience, landlords/ow[n]ers of property get into disputes
with their tenants over interpretation of the lease and the
landlords/owners want their interpretation of record for protection.
13. One way of handling the above situation is to file a declaratory
judgment action on the contested interpretation in the lease and
then file a lis pendens in the real property records of the county.
14. This would prevent any counter-claim for clouding the title or
interfering with prospective business relations.
15. Filing [the Memorandum] in this case fell below the standard of care
for a reasonably prudent attorney because it was foreseeable that
Cypress would plead that the action clouded the title and interfered
with their leasehold. . . . The standard of care would have been not
to file such a document and to advise [Nalle] not to file such a
document in the real property records of Travis County without first
being in litigation so that [Nalle] could take advantage of the
litigation privilege. [Rogers] fell below the standard of care in this
regard.
Also included in Nalle’s summary judgment evidence was an affidavit by Nalle’s
president stating in part:
Rogers never told me that by filing the Memorandum in the real property
records that [Cypress] would probably, immediately, file a declaratory
judgment action [or] claim for clouding [Cypress]’s leasehold interest and
for interference. Had Rogers done so, I would not have agreed to sign
and have the Memorandum filed in the real property records of Travis
County.
Finally, Nalle included an affidavit by John Coleman, a certified real estate appraiser,
stating that the value of the fee simple interest in the subject property was $13,500,000
19
and the value of the leased fee interest in the property was $4,350,000 as of March 12,
2007. According to Coleman, the difference between those two numbers—
$9,150,000—represents the amount that Nalle lost as a result of having to settle its
claims with Cypress.
Porter contended that the foregoing affidavit testimony was insufficient to create
a fact issue on Rogers’s negligence because attorneys are not negligent where their
decisions are based on unsettled law. See Cosgrove v. Grimes, 774 S.W.2d at 664.
They further argued that the issues surrounding the filing of the Memorandum were
unsettled because (1) the original lease document appeared to explicitly authorize the
filing of the Memorandum, and (2) the alternative suggested by Nalle’s experts—filing a
declaratory judgment action and lis pendens containing Nalle’s interpretation of the
lease—was unavailable as a matter of law.
We agree with Porter that summary judgment was proper as to Nalle’s failure-to-
advise claim (i.e., its claim that Rogers breached the standard of care by failing to
advise Nalle not to file the Memorandum).13 Nalle’s summary judgment evidence
established that filing the Memorandum may have foreseeably led to Cypress initiating
litigation against Nalle and that Rogers failed to advise Nalle against that course of
13
The trial court granted Porter’s first summary judgment motion, a “hybrid” traditional/no-
evidence motion, with respect to Nalle’s failure-to-advise claim. Ordinarily, when a trial court does not
specify its grounds for granting a “hybrid” motion, we first employ the no-evidence summary judgment
standard of review. See Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004). If summary
judgment was not proper on no-evidence grounds, we then employ the traditional summary judgment
standard of review. See id. Here, however, the only no-evidence ground presented in Porter’s first
summary judgment motion alleged that there was no evidence that Cypress suffered damages. In light of
our conclusion that summary judgment on Nalle’s Memorandum and failure-to-advise claims was
appropriate on other, traditional grounds, we need not review the no-evidence ground. See TEX. R. APP.
P. 47.1; Joe v. Two Thirty Nine J.V., 145 S.W.3d 150, 157 (Tex. 2004) (noting that appellate courts will
affirm a summary judgment “if any of the theories presented to the trial court and preserved for appellate
review are meritorious”); State Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374, 381 (Tex. 1993) (“[W]hen
there are multiple grounds for summary judgment and the order does not specify the ground on which the
summary judgment was granted, the appealing party must negate all grounds on appeal.”).
20
action. However, it did not establish that Roger’s failure to so advise Nalle was
negligent. Porter’s summary judgment evidence included a copy of the underlying lease
agreement between Nalle and Cypress, paragraph 11 of which stated: “RECORDING.
This Lease or any notice of lease may be recorded by either Lessor or Lessee.”
Attorney Christopher Bell, who is board-certified in commercial real estate law, stated
the following in an affidavit attached to Porter’s second summary judgment motion:
This is a highly unusual lease provision. While it is customary for the
parties to agree to jointly execute and record a memorandum of a lease
(typically reciting the existence of the lease and its key non-economic
terms), it is uncommon in the extreme to allow either party to unilaterally
record any lease notice at any time. And yet, this right was explicitly given
to [Nalle] under the express terms of the subject lease. . . . A reasonable
prudent lawyer would have recognized this unusual right contained in the
lease, at Paragraph 11, and had a duty to use it to the benefit of his client.
Rogers complied fully with that duty to [Nalle].
Nalle’s experts did not address Paragraph 11 of the underlying lease agreement. Bell’s
testimony therefore established that, at the very least, the law was unsettled regarding
the propriety of filing the Memorandum in the Travis County public records. 14
Accordingly, Rogers’s failure to advise Nalle not to file the Memorandum was a decision
that a reasonably prudent attorney could have made. See Cosgrove, 774 S.W.2d at
665. It may not form the basis of a legal negligence claim.
14
Bell also averred that the filing of the Memorandum was legally justified because the only
alternative suggested by Nalle’s experts—i.e., filing a declaratory judgment action and lis pendens
containing Nalle’s lease interpretation—was unavailable to Nalle. See TEX. PROP. CODE ANN. § 12.007
(West Supp. 2011) (“[D]uring the pendency of an action involving title to real property, the establishment
of an interest in real property, or the enforcement of an encumbrance against real property, a party to the
action who is seeking affirmative relief may file for record with the county clerk of each county where a
part of the property is located a notice that the action is pending.”). Bell contended that the lease
interpretation dispute was not an “action involving . . . the establishment of an interest in real property.”
See id.; Helmsley-Spear of Tex., Inc. v. Blanton, 699 S.W.2d 643, 644–45 (Tex. App.—Houston [14th
Dist.] 1985, orig. proceeding) (declaring void lis pendens filed in landlord/tenant dispute because section
12.007 was not applicable). We need not address this contention because of our conclusion herein that
Rogers’s actions and omissions were justified by paragraph 11 of the underlying lease. See TEX. R. APP.
P. 47.1
21
The same reasoning applies to Nalle’s Memorandum claim (i.e., its claim that
Rogers breached the applicable standard of care by filing the Memorandum). Because
paragraph 11 of the underlying lease agreement explicitly and conspicuously permitted
the filing of “any notice of lease” by any party to the lease, the decision made by Rogers
to file the Memorandum was one that a reasonably prudent attorney could have made.
See id.
Because the summary judgment evidence established that Rogers’s actions and
inactions were at least based on unsettled law, the trial court did not err in concluding
that Porter was entitled to judgment as a matter of law on the failure-to-advise and
Memorandum claims.
4. Photography Claim
We next address the trial court’s summary judgment dismissing Nalle’s
photography claim (i.e., that Rogers was negligent in entering the subject property to
photograph alleged lease infractions by Cypress and in advising Nalle’s president to do
so, and that this action gave rise to Cypress’s claims against Nalle). Porter’s first
summary judgment motion alleged that it was entitled to judgment as a matter of law on
this claim because Rogers’s actions (1) did not give rise to any claim by Cypress for
breach of the covenant of quiet enjoyment, and (2) did not breach any duty owed by
Rogers. In its second summary judgment motion, Porter contended that Rogers’s
actions did not cause any contractual provision between Nalle and Cypress to be
breached.
We agree that summary judgment was warranted on this claim. Nalle’s summary
judgment evidence included Lione’s affidavit, which stated in part:
22
[Rogers], in my opinion, fell below the standard of care of a reasonable
and prudent attorney by advising [Nalle] to go on the premises and to take
so many (3,000) photographs. . . . [Rogers’s] advice for [Nalle] to take so
many photographs created, in my opinion, Cypress’s interference and
breach of quiet enjoyment claims. Giving the advice to [Nalle] to go on the
property unannounced, foreseeably, in my opinion, created the claims
pled by Cypress against [Nalle]. The standard of care for a reasonably
prudent attorney would also require that attorney not to give negligent
advice, which this was.
A breach of the covenant of quiet enjoyment requires an eviction, actual or
constructive, brought about by the acts of the landlord, those acting for the landlord, or
those acting with the landlord’s permission. 2616 S. Loop L.L.C. v. Health Source
Home Care, Inc., 201 S.W.3d 349, 359 n.7 (Tex. App.—Houston [14th Dist.] 2006, no
pet.) (citing Lazell v. Stone, 123 S.W.3d 6, 12 n.1 (Tex. App.—Houston [1st Dist.] 2003,
pet. denied) (“The elements of a breach of the warranty of quiet enjoyment are the
same as the elements in a constructive eviction claim.”)). The essential elements of
constructive eviction are: (1) an intention on the part of the landlord that the tenant shall
no longer enjoy the premises; (2) a material act by the landlord that substantially
interferes with the tenant’s intended use and enjoyment of the premises; (3) the act
permanently deprives the tenant of the use and enjoyment of the premises; and (4) the
tenant abandons the premises within a reasonable time after the commission of the act.
Id. (citing Holmes v. P.K. Pipe & Tubing, Inc., 856 S.W.2d 530, 539 (Tex. App.—
Houston [1st Dist.] 1993, no writ)).
Nalle’s summary judgment evidence established that Rogers advised Nalle’s
president to enter upon the premises to photograph alleged lease infractions, and that
Rogers repeatedly did so himself. However, Nalle’s evidence did not show that Cypress
had been actually evicted from the property, nor did it establish any of the
23
aforementioned elements of a constructive eviction. Accordingly, no claim for breach of
quiet enjoyment could have arisen from Rogers’s actions. Summary judgment was
proper on this claim.
As to Nalle’s claim that Rogers’s actions led to a claim by Cypress for breach of
contract, that too was unavailable as a matter of law. Porter’s second summary
judgment motion included a copy of the lease agreement between Nalle and Cypress,
paragraph 19 of which stated:
LESSOR’S RIGHT OF ENTRY. Lessor [Nalle] shall have the right, at all
reasonable hours, to enter the Premises for the following: inspection;
cleaning or making repairs; alterations or additions as Lessor may deem
necessary or desirable; determining Lessee’s use of the Premises;
determining if an act of default under this Lease has occurred; or showing
the Premises to others at any time within 180 days of the termination of
the then current term of this Lease.
This clause explicitly authorizes the action that Nalle says led to Cypress’s breach of
contract claim—i.e., entering upon the premises to inspect and to “determin[e] if an act
of default under this Lease has occurred.” Because of this provision, Rogers’s decision
to enter upon the property in order to photograph alleged lease infractions by Cypress,
and to advise Nalle’s president to do the same, were decisions that a reasonably
prudent attorney could have made. See Cosgrove, 774 S.W.2d at 665. The trial court
did not err in granting summary judgment dismissing this claim.
5. Fraud Claim
The trial court granted Porter’s second summary judgment motion with respect to
Nalle’s allegation that Porter and Rogers committed fraud. Nalle’s live petition alleged
in part that Rogers
fraudulently misrepresented his legal experience and credentials to Nalle
for the purpose of securing Nalle’s business as a client. . . . Rogers made
24
material misrepresentations in overstating his experience and expertise in
commercial real estate lending disputes. Those representations were
material because they formed the basis of Nalle’s decision to hire
Rogers. . . . Rogers’s representations were false. Rogers is not board
certified in commercial real estate law, which may suggest a certain level
of experience, and even after the opportunity to prove his credentials in
pre-trial discovery, he has failed or refused to produce any evidence giving
credit to his proclaimed experience.
In its second summary judgment motion, Porter argued that it was entitled to judgment
as a matter of law because: (1) the fraud claim constituted an improper effort by Nalle
to “fracture” its legal malpractice claims15; (2) there was “no evidence of any false
misrepresentations by Rogers as to his legal credentials or experience”; and (3) there
was no evidence of damages independent of legal negligence damages. 16
In an affidavit filed with Nalle’s response to Porter’s second summary judgment
motion, Nalle’s president stated in relevant part as follows:
4. In the underlying case, when I received correspondence from
[Cypress] concerning [Nalle]’s interpretation of the lease provision
regarding buildout and remodeling, I sought legal advice. Because of
our respective interpretations of the lease, I was concerned our
dispute might go to litigation. I was referred to Pat Rogers by
15
The rule against “fracturing” a legal negligence claim “prevents legal-malpractice plaintiffs from
opportunistically transforming a claim that sounds only in negligence into other claims.” Deutsch v.
Hoover, Bax & Slovacek, L.L.P., 97 S.W.3d 179, 189 (Tex. App.—Houston [14th Dist.] 2002, no pet.); see
Beck v. Law Offices of Edwin J. Terry, Jr., P.C., 284 S.W.3d 416, 427 (Tex. App.—Austin 2009, no pet.).
The rule provides that, “[i]f the gist of a client’s complaint is that the attorney did not exercise that degree
of care, skill, or diligence as attorneys of ordinary skill and knowledge commonly possess, then that
complaint should be pursued as a negligence claim, rather than some other claim.” Deutsch, 97 S.W.3d
at 189. “If, however, the client’s complaint is more appropriately classified as another claim, for example,
fraud, . . . breach of fiduciary duty, or breach of contract, then the client can assert a claim other than
negligence.” Id. Nalle has not cited any Texas Supreme Court case law, nor any case law from this
Court, applying this rule, and we find none. Nevertheless, we need not decide whether this rule applies
generally, or whether it barred Nalle’s fraud claim in particular, because of our conclusion herein that
summary judgment on the fraud claim was warranted on no-evidence grounds. See Joe, 145 S.W.3d at
157.
16
In the discussion of this issue in its appellate brief, Nalle states: “[Porter] did not assert, based
on either traditional or no-evidence grounds, that Nalle could present no evidence that Rogers had
misrepresented his legal experience and credentials as pleaded by Nalle.” That is incorrect. Porter’s
second summary judgment motion explicitly asserted that Nalle had “no evidence of any false
misrepresentations by Rogers as to his legal credentials or experience . . . .”
25
Elizabeth Rogers, my former fiancé[e], Pat Rogers’s ex-wife, and
partner in the law firm Vinson & Elkins.
5. I met with Pat Rogers and interviewed him regarding his experience
in handling commercial lease matters. Rogers told me he was very
experienced in handling such matters and had represented both
sides of all issues regarding commercial leasing matters. Rogers
agreed to charge Nalle $190 per hour, which was, according to him,
the “family rate.” We did not have a written fee contract.
Nalle has directed us to no other summary judgment evidence supporting its fraud
claim.17
This evidence was insufficient to raise a genuine issue of material fact as to the
fraud claim. See TEX. R. CIV. P. 166a(i). Although Nalle’s president testified that
Rogers made certain representations to him regarding his qualifications, there was no
evidence adduced that those representations were false. See, e.g., Italian Cowboy
Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 337 (Tex. 2011) (noting
that one necessary element of a fraud claim is that “the representation was false”).
Summary judgment was therefore proper on this claim.
6. Forcible Detainer Claim
Finally, we address Nalle’s claim that Rogers committed legal malpractice by
failing to file a forcible detainer action seeking to evict Cypress from the subject
property. In its live pleading, Nalle claimed that this failure proximately caused Nalle to
settle its litigation with Cypress and waive its claim that the lease had been terminated
by Cypress’s infractions.
17
On appeal, Nalle confines its arguments regarding its fraud claim to the issue of whether or not
the claim constituted impermissible “fracturing” of its legal malpractice claim. But we must affirm a
summary judgment “if any of the theories presented to the trial court and preserved for appellate review
are meritorious.” Id.
26
Porter’s first summary judgment motion, which the trial court granted as to the
forcible detainer claim, stated in relevant part as follows:
9. [Nalle] Cannot Show that it Would Have Been Successful on its
Lease Termination Claims. [Nalle] cannot show causality, as it cannot
show that it would have been successful on its underlying Lease
Termination case. There is no evidence that any claimed breaches and
defaults under the Master Lease were in fact defaults, and even if there
was such evidence, there is no evidence that any reasonable jury would
have found those to have been material, that a court would have found
that such a finding was supported by some evidence or factually sufficient
evidence, and, even if it had, that it would have construed the Master
Lease so as to warrant termination or forfeiture in [Nalle’s] benefit.
We construe this argument as asserting summary judgment grounds challenging the
forcible detainer claim on the basis that there was no evidence of causation.
The parties appear to agree that, in order to show causation, Nalle would be
required to show that it would have likely been successful in its underlying lease
termination claim against Cypress; and that, in turn, would require a showing that
Cypress’s breaches of the underlying lease were material. See Rangel, 177 S.W.3d at
22 (setting forth “suit-within-a-suit” requirement for legal negligence claims arising from
prior litigation); see also Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195,
198 (Tex. 2004) (noting that a non-breaching party’s obligation to continue performance
of a contract is discharged or excused only when the other party’s breach is material).
In Mustang Pipeline, the Texas Supreme Court identified the following five
circumstances as significant in determining whether a failure to perform is material:
(a) the extent to which the injured party will be deprived of the benefit
which he reasonably expected;
(b) the extent to which the injured party can be adequately
compensated for the part of that benefit of which he will be
deprived;
27
(c) the extent to which the party failing to perform or to offer to perform
will suffer forfeiture;
(d) the likelihood that the party failing to perform or to offer to perform
will cure his failure, taking account of the circumstances including
any reasonable assurances;
(e) the extent to which the behavior of the party failing to perform or to
offer to perform comports with standards of good faith and fair
dealing.
Mustang Pipeline Co., 134 S.W.3d at 199 (citing RESTATEMENT (SECOND) OF CONTRACTS
§ 241 (1981)).
In response to Porter’s summary judgment motion, Nalle produced the affidavits
of Barton and Lione. Barton set forth the criteria for materiality as stated in Mustang
Pipeline and opined that: “The parking violations in question exposed [Nalle] to
potential claims for personal injury and property damage sustained by third parties, as
well as fines for violations of City ordinances. The parking violations would, therefore,
be material under the criteria specified by the Texas Supreme Court in Mustang
Pipeline.” Barton further concluded that “[i]f the case had proceeded to trial, probably
[Nalle] would have prevailed on all of these issues, leaving [Cypress] without a viable
defense against [Nalle’s] claim that the Lease had been terminated by reason of
[Cypress]’s default.” Lione testified that “the illegal parking operation which was
ongoing . . . would have probably been found by the JP Court to be a terminable event.”
Lione further stated that “if this case had been appealed to County Court at Law, then
the Court would have affirmed the JP Court’s ruling of termination based upon a strong
case of termination as fully described in the expert report/affidavit of [Barton].”
Nalle relies on Barton’s and Lione’s affidavits in arguing that it raised a fact issue
on the issue of the materiality of Cypress’s breaches. However, as noted, the trial court
28
granted Porter’s motion to exclude much of the affidavit testimony on the basis that the
opinions expressed therein were conclusory and unreliable. See, e.g., Earle v. Ratliff,
998 S.W.2d 882, 890 (Tex. 1999) (“An expert’s simple ipse dixit is insufficient to
establish a matter; rather, the expert must explain the basis of his statements to link his
conclusions to the facts.”); Gammill v. Jack Williams Chevrolet, 972 S.W.2d 713, 727
(Tex. 1998) (noting that an expert opinion is unreliable if “there is simply too great an
analytical gap between the data and the opinion proffered”). The excluded portions
include all of the testimony quoted above. The remaining portions of Barton’s and
Lione’s affidavits which were accepted as summary judgment evidence “do no more
than create a mere surmise or suspicion” that Nalle would have prevailed on its lease
termination claim. See Ortega, 97 S.W.3d at 772.
Nalle contends by a sub-issue and a footnote in its appellate brief that the trial
court abused its discretion by excluding the specified portions of the affidavits. A trial
court’s decision to admit or exclude evidence is reviewed for an abuse of discretion.
See In re J.P.B., 180 S.W.3d 570, 575 (Tex. 2005). Having reviewed the record, we
disagree that the trial court abused its discretion. In the excluded portions of his
affidavit, Barton testified as to the likely outcome of a forcible detainer action filed by
Nalle seeking to evict Cypress. However, although Barton correctly sets forth the
criteria for determining whether a failure to perform under a contract is material, he does
not apply that law to the facts of the case. Barton merely states: “It is difficult to
determine a circumstance under which a court would not view a violation of a lease
provision requiring the tenant to comply with all applicable laws as material, even if the
specific conduct giving rise to the violation is not mentioned expressly in the lease.” He
29
does not, however, analyze the particular facts of Nalle’s lease termination claim in light
of the Mustang Pipeline criteria. Without such an analysis, Barton’s opinion that a
forcible detainer action would have been successful bridged “too great an analytical
gap.” See Gammill, 972 S.W.2d at 727. It was properly excluded.
The excluded portions of Lione’s affidavit, which referred to Barton’s testimony
regarding the applicable law, similarly failed to explain how application of the relevant
law would result in Nalle being successful in a forcible detainer action. Lione failed to
“explain the basis of his statements to link his conclusions to the facts.” Earle, 998
S.W.2d at 890. The testimony was therefore conclusory and properly excluded. See
id.; Gammill, 972 S.W.2d at 727.
Considering only competent, admissible evidence, we find that Nalle failed to
raise a genuine issue of material fact as to causation with respect to the forcible
detainer claim. See TEX. R. CIV. P. 166a(i); Rangel, 177 S.W.3d at 22. Summary
judgment on that claim was proper.18
Because summary judgment in favor of Porter was proper on all of Nalle’s
counterclaims, we overrule Nalle’s second issue.
18
On appeal, Porter additionally argues that summary judgment on the forcible detainer claim
was proper because Cypress was not in “physical or actual possession” of the premises. See TEX. R.
CIV. P. 746 (“In case of forcible entry or of forcible detainer under Sections 24.001–24.008, Texas
Property Code, the only issue shall be as to the right to actual possession; and the merits of the title shall
not be adjudicated.”). Porter further argued before the trial court that summary judgment was proper
because of certain deposition testimony by Nalle’s president; specifically, when asked whether he had
any “grievance” regarding Rogers’s failure to file a forcible detainer action, Nalle’s president replied: “I
don’t—at this time I don’t, but that may come up later.” Porter contended in its summary judgment motion
that this testimony constituted a waiver of Nalle’s forcible detainer claim. We need not address either of
these grounds for summary judgment because we have already concluded that summary judgment was
proper based on no-evidence grounds. See TEX. R. APP. P. 47.1.; Joe, 145 S.W.3d at 157 (Tex. 2004).
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C. Judgment on Porter’s Claims
By its third issue, Nalle contends that the trial court’s judgment awarding
damages and attorney’s fees to Porter must be vacated in the event that we reverse the
summary judgments dismissing Nalle’s counterclaims. It claims that, in the event that
the summary judgment is reversed, it would be entitled to defend against Porter’s claim
for unpaid fees by asserting that Porter should not be entitled to recover those fees due
to its legal malpractice. See Weisman v. Lackshin & Nathan, No. 01-88-00003-CV,
1988 Tex. App. LEXIS 3205, at *8 (Tex. App—Houston [1st Dist.] Dec. 29, 1988, no
writ) (mem. op., not designated for publication) (reversing a summary judgment
awarding unpaid fees to a law firm because it had already reversed the trial court’s
summary judgment dismissing a legal malpractice counterclaim filed by the client, and
noting that the client’s legal malpractice claim “was the basis for the affirmative defense
of offset” raised in response to the law firm’s summary judgment motion)
We have overruled Nalle’s issue challenging the trial court’s summary judgment
dismissing its counterclaims. Accordingly, Nalle’s third issue is overruled as moot.
D. Cross-Appeal
By one issue on cross-appeal, Porter argues that the trial court erred in denying
its motion for judgment notwithstanding the jury’s verdict with respect to attorney’s fees.
The jury was asked, in charge question number six, to assess the “reasonable
fee for the necessary services of [Porter]’s attorneys in this case to collect the amount
you found owed by Nalle . . . .” The jury was asked to assess both the fees incurred by
Porter’s attorneys and the fees attributable to services provided by Porter’s outside
counsel, the law firm of Harris & Greenwell. The jury answered as follows:
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a. For preparation and trial in the collection of the amounts you found
to be owed in response to Question No. 4 [regarding contract
damages]:
1. Harris & Greenwell: $150,000.00
2. [Porter]: $0
b. For defense of the “Claims” against [Porter] and Pat Rogers:
1. Harris & Greenwell: $0
2. [Porter]: $0
c. For representation through appeal to the court of appeals.
1. Harris & Greenwell: $0
d. For representation at the petition for review stage in the Supreme
Court of Texas.
1. Harris & Greenwell: $0
e. For representation at the merits briefing sta[g]e in the Supreme
Court of Texas.
1. Harris & Greenwell: $0
f. For representation through oral argument and the completion of
proceedings in the Supreme Court of Texas.
1. Harris & Greenwell: $0
The final judgment, reflecting the jury’s verdict, awarded Porter $150,000 “for collection
of attorney’s fees” and awarded zero appellate fees. Porter contends that each of the
jury’s “$0” answers were unsupported by the evidence.
1. Applicable Law and Standard of Review
Section 38.001 of the civil practice and remedies code provides that a “person
may recover reasonable attorney’s fees from an individual or corporation, in addition to
the amount of a valid claim and costs, if the claim is for . . . an oral or written contract.”
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TEX. CIV. PRAC. & REM. CODE ANN. § 38.001(8) (West 2008). The determination of what
is a reasonable fee is a question for the trier of fact. Mercier v. Sw. Bell Yellow Pages,
Inc., 214 S.W.3d 770, 775 (Tex. App.—Corpus Christi 2007, no pet.). Here, the jury
was instructed on the following factors to be considered in determining reasonableness:
(1) the time and labor required, the novelty and difficulty of the questions
involved, and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the
particular employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers
performing the services; and
(8) whether the fee is fixed or contingent on results obtained or
uncertainty of collection before the legal services have been
rendered.
TEX. DISCIPLINARY R. PROF’L CONDUCT 1.04(b), reprinted in TEX. GOV’T CODE ANN., tit. 2,
subtit. G, app. A (West 2004); see Arthur Andersen & Co. v. Perry Equip. Corp., 945
S.W.2d 812, 818 (Tex. 1997); Mercier, 214 S.W.3d at 775–76. The court is not required
to receive evidence on each of these factors. Mercier, 214 S.W.3d at 776 (citing
Burnside Air Conditioning & Heating, Inc. v. T.S. Young Corp., 113 S.W.3d 889, 897–98
(Tex. App.—Dallas 2003, no pet)). The court can also look at the entire record, the
evidence presented on reasonableness, the amount in controversy, the common
knowledge of the participants as lawyers and judges, and the relative success of the
parties. Id.
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We review a jury’s finding as to the amount of reasonable and necessary
attorney’s fees for legal sufficiency of the evidence. Carlile v. RLS Legal Solutions, Inc.,
138 S.W.3d 403, 409 (Tex. App.—Houston [14th Dist.] 2004, no pet.). We will affirm the
finding unless the record shows: (1) the complete absence of evidence of a vital fact;
(2) that the court is barred by the rules of law or evidence from giving weight to the only
evidence offered to prove a vital fact; (3) that the evidence offered to prove a vital fact is
no more than a scintilla; or (4) that the evidence establishes conclusively the opposite of
a vital fact. City of Keller, 168 S.W.3d at 810. We view the evidence in the light most
favorable to the finding, crediting favorable evidence if a reasonable fact-finder could
and disregarding contrary evidence unless a reasonable fact-finder could not. Id. at
807. The ultimate test is whether the evidence would enable reasonable and fair-
minded people to make the finding under review. Id. at 827. “We must be mindful,
however, that we are reviewing a jury’s verdict and may not substitute our judgment for
that of the factfinder.” C.M. Asfahl Agency v. Tensor, Inc., 135 S.W.3d 768, 802 (Tex.
App.—Houston [1st Dist.] 2004, no pet.).
2. Analysis
Rogers testified that a reasonable and necessary fee for his services undertaken
with respect to the fee collection case against Nalle was $42,400; he further testified
that a reasonable and necessary fee for Porter’s services undertaken in defending
against Nalle’s counterclaims was $148,400. Andrew Greenwell of Harris & Greenwell
testified that a reasonable and necessary fee for his firm’s trial services was $301,600.
As noted, the jury awarded only $150,000 in fees.
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On appeal, Nalle argues that the jury’s refusal to award fees attributable to
Porter’s in-house work was supported by the record because Porter presented no
evidence explaining why it was reasonable and necessary for Porter to be represented
by both outside and in-house counsel. We agree. The jury could have reasonably
determined that the work done by Rogers and other Porter attorneys was duplicative of
the work done by outside counsel, especially considering the fact that no itemized billing
statements were offered into evidence.19 It is also noteworthy that the total amount
involved in the litigation was only $132,661 in allegedly unpaid fees arising from the
Cypress litigation; the jury could have considered this fact in rejecting Porter’s request
for fees of more than three times that amount incurred in its collection case against
Nalle. See Arthur Andersen, 945 S.W.2d at 818; Ragsdale v. Progressive Voters
League, 801 S.W.2d 880, 882 (Tex. 1990)20; Mercier, 214 S.W.3d at 776.
19
In closing arguments, Nalle’s counsel emphasized the fact that, while detailed records
regarding Porter’s billing in the Cypress litigation were offered into evidence at trial, neither Porter nor
Greenwell offered detailed billing records regarding their work in the fee collection or legal malpractice
cases. Porter correctly notes that billing records are not required under Texas law in order to establish
entitlement to attorney’s fees, see, e.g., RM Crowe Prop. Servs. Co. v. Strategic Energy, LLC, 348
S.W.3d 444, 452 (Tex. App.—Dallas 2011, no pet.); however, the jury was entitled to consider the
absence of such records here in reaching their conclusion as to the amount of reasonable and necessary
fees.
20
In Ragsdale, the Texas Supreme Court stated that “where the testimony of an interested
witness is not contradicted by any other witness, or attendant circumstances, and the same is clear, direct
and positive, and free from contradiction, inaccuracies, and circumstances tending to cast suspicion
thereon, it is taken as true, as a matter of law.” Ragsdale v. Progressive Voters League, 801 S.W.2d 880,
882 (Tex. 1990) (citing Cochran v. Wool Growers Central Storage Co., 140 Tex. 184, 166 S.W.2d 904,
908 (1942)). However, the Court noted that:
we do not mean to imply that in every case when uncontradicted testimony is offered it
mandates an award of the amount claimed. For example, even though the evidence
might be uncontradicted, if it is unreasonable, incredible, or its belief is questionable, then
such evidence would only raise a fact issue to be determined by the trier of fact.
Id.
35
The jury’s refusal to award fees attributable to defending against Nalle’s
counterclaims is also supported by the record. As Porter notes, the trial court granted
Nalle’s motion in limine preventing Porter from discussing the trial court’s summary
judgment rulings on the legal malpractice counterclaims. Accordingly, the trial court
allowed only limited testimony regarding fees incurred with respect to Porter’s defense
of those claims. Porter does not contend on appeal that the trial court’s order in limine
was erroneous. Our review is therefore limited to the evidence appearing in the record,
and viewing that evidence in the light most favorable to the jury’s verdict, see City of
Keller, 168 S.W.3d at 807, we find that the jury’s award of zero fees attributable to the
defense of the legal malpractice claims was supported by legally sufficient evidence.
However, the evidence did not support an award of zero conditional appellate
attorney’s fees. Greenwell testified that the following amounts would be reasonable and
necessary fees for appellate proceedings: $40,000 for an appeal to this Court; $10,000
for a petition for review to the Texas Supreme Court; $20,000 for supreme court
briefing; and $5,000 for oral argument in the supreme court. In its cross-appellee’s
brief, Nalle does not direct us to any evidence casting doubt on the reasonableness or
necessity of the appellate fees testified to by Greenwell; instead, it argues only that the
jury’s refusal to award appellate fees was justified because there was no evidence as to
how the fees would be apportioned as between Porter and Harris & Greenwell. It does
not cite any authority, however, and we find none, establishing that such apportionment
was necessary. In the absence of any evidence challenging the reasonableness or
necessity of the appellate fees testified to by Greenwell, no reasonable juror could have
36
concluded that zero conditional appellate attorney’s fees should have been awarded.
See id. at 827.
We therefore reverse the trial court’s judgment insofar as it fails to award
conditional appellate attorney’s fees, and we remand the cause with instructions to
award such fees consistent with the evidence adduced in this case. The remainder of
the trial court’s judgment as to attorney’s fees is affirmed.
III. CONCLUSION
The judgment of the trial court is affirmed in part and reversed in part as stated
herein, and the cause is remanded for further proceedings consistent with this opinion.
DORI CONTRERAS GARZA,
Justice
Delivered and filed the
18th day of April, 2013.
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