The Texas Supreme Court handed down one signed opinion and four per curiam dispositions with today’s order list.
Some (but not very much) of the attorney’s fees from the original lawsuit are recoverable in a later malpractice action
Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. National Development and Research Corporation, No. 07-0818
This is a case about what categories of damages are recoverable for legal malpractice.
The significant holding — and I’m not just saying this as an appellate lawyer — is the Court’s recognition that some of the attorney’s fees paid out to appeal the underlying judgment were recoverable as damages in the later malpractice suit.
We see little difference between damages measured by the amount the malpractice plaintiff would have, but did not, recover and collect in an underlying suit and damages measured by attorney’s fees it paid for representation in the underlying suit, if it was the defendant attorney’s negligence that proximately caused the fees. In both instances, the attorney’s negligence caused identifiable economic harm to the malpractice plaintiff. The better rule, and the rule we adopt, is that a malpractice plaintiff may recover damages for attorney’s fees paid in the underlying case to the extent the fees were proximately caused by the defendant attorney’s negligence.
The key is that last phrase: “to the extent the fees were proximately caused by the defendant attorney’s negligence.”
So the additional portion of fees attributable to the original lawyer’s negligence — added hearings, procedures, or appellate procedures — might be recoverable in a later malpractice action.
The Court rejects the argument, however, that the whole appeal costs are recoverable. In its words, “There is no evidence that if NDR had recovered a favorable judgment in the Panda suit, it would not have paid appellate fees to defend the judgment.”
But, here, NDR also hired separate appellate counsel to assist with briefing a particular issue — the very issue involved in the malpractice. The Court concluded that there was some evidence that those damages were, indeed, a result of the law firm’s negligence. (( The lesson for clients who are contemplating malpractice suits could be “segregate your fees.” The lesson for later appellate counsel in these cases could be the same. To the extent you see a possible malpractice issue, your client may benefit if you can clearly distinguish the portion of your fees attributable to that issue. )) With that in mind, the Court chose to remand the math to be sorted out by the courts below.
On the other categories of damages, the Court agreed with the court of appeals that NDR had failed to show that — even if there had been no negligence and it had obtained a large judgment in the original action — those damages could ever have been collected from the original defendant. The Texas Supreme Court reaffirmed that it’s not enough for a malpractice plaintiff to show that they could have gotten a large judgment but for the malpractice. As one of my professors was fond of saying, “A judgment is just a piece of paper suitable for framing.”
Justice Johnson wrote the opinion for the Court. Justice Guzman did not sit on this decision.
A corporate liability insurance policy that excludes defamation also excludes defamation made by “vice-principals” of the corporation
Chrysler Insurance Company, f/k/a DaimlerChrysler Insurance Company v. Greenspoint Dodge of Houston, Inc., No. 08?0780 (per curiam)
This case is about construing an insurance policy that excluded defamation claims were the insured had knowledge that the statements were false when made.
The wrinkle is that the insured was a corporation — and the people with knowledge were not high-ranking officers. Nonetheless, the corporation was subjected to a defamation claim in an arbitration proceeding. Its insurer denied coverage.
The fascinating part of this opinion is its discussion of a category of corporate officials who — although not truly “officers” — nonetheless are important enough that their personal knowledge can be imputed back to the corporation itself.
That category is “corporate vice-principals”: (( Yes, it sounds like those are the people to whom you would be sent if you were tardy too often to meetings or didn’t have a hall pass. ))
A corporation’s knowledge, however, is not limited to what its officers know, but may include other employees’ knowledge, if those employees are corporate vice-principals.
This issue was apparently “litigated” in a previous arbitration proceeding, in which these people were found to be corporate vice-principals.
What is a little interesting (to me, at least) is that the Texas Supreme Court treated the “findings” of the arbitration panel about whether these people were vice-principals as dispositive of this later insurance-coverage dispute: “The arbitrators found that the individuals who engaged in the campaign to defame and injure Martinez were Greenspoint vice-principals.”
The Court’s review might have been somewhat constrained because the prior proceeding was an arbitration. But in these circumstances, the Court concluded that the insurance policy did not cover this defamation claim:
The policy expressly named Greenspoint as an insured, and the arbitration proceeding effectively determined that Greenspoint made the defamatory remarks, through its vice-principals, and knew them to be false when made. Accordingly, there is no coverage under the Primary Policy for Greenspoint’s defamation, and the court of appeals erred in holding otherwise.
Justice Guzman did not sit on this per curiam.
If the trial court dismisses on jurisdictional grounds before entering a jury’s verdict as a judgment, the court of appeals cannot itself enter that judgment
City of Houston, Texas v. Trail Enterprises, Inc. d/b/a Wilson Oil Company, et al., No. 08?0413 (per curiam)
The trial court held a jury trial before deciding to grant the City’s motion arguing that the case was not yet ripe. The trial court dismissed the case on that ground of subject-matter jurisdiction before it formally rendered judgment.
The court of appeals reversed, concluding that the action was ripe. We agree that the action was ripe, and on this issue we affirm. Rather than remanding, though, the court of appeals rendered judgment on the jury verdict for the owners based on the trial court’s finding of liability. However, because the trial court relied only on the jurisdictional ripeness issue in disposing of the case, it was improper for the court of appeals to render judgment on the jury verdict. Our rules provide procedures through which parties may challenge a verdict’s or judgment’s propriety. E.g., Tex. R. Civ. P. 301 (motion for judgment notwithstanding the verdict); Tex. R. Civ. P. 320 (motion for new trial). Remand was necessary at least to enable these further proceedings. See TEX. R. APP. P. 43.3. The court of appeals circumvented these procedures by treating a motion for summary judgment on a jurisdictional issue as if it were a motion for judgment notwithstanding the verdict, and doing so was error.
[some citations omitted]
If the trial court never wraps ups its proceedings by rendering a final judgment, then the appeal is merely interlocutory — and the relief that can be awarded on appeal is somewhat limited.
Default judgements require strict compliance with every procedural rule
Insurance Company of the State of Pennsylvania v. Edward Lejeune, No. 08?0829 (per curiam)
Because default judgments deprive a defendant of their day in court, even a fairly small defect introduced by the clerk’s office can undermine a default judgment:
In this case we consider whether a default judgment must be overturned because the clerk’s endorsement of the return of citation lacked the time of service, as required by Rules 16 and 105 of the Texas Rules of Civil Procedure. “For well over a century, this court has required that strict compliance with the rules for service of citation affirmatively appear on the record in order for a default judgment to withstand direct attack.” … Because we hold that the endorsement in this case did not satisfy Rules 16 and 105, we reverse the court of appeals’ judgment and remand the case to the trial court.
The Court remands in a case where there was at least some evidence of damages
Aquaplex, Inc. and James Edward Jones, Jr. v. Racho La Valencia, Inc. and Charles R. “Randy” Turner, No. 08-0280 (per curiam)
In this case, we decide whether the evidence presented at trial was legally sufficient to support the award of damages. The trial court believed so and entered judgment on the jury verdict, but the court of appeals reversed, holding that no evidence supported the amount of damages awarded….
We hold that some evidence supported an award of damages for fraud…, just not at the level awarded by the trial court. This Court may not order a remittitur, but the courts of appeals may. Tex. R. App. P. 46.3. … We remand the case to the court of appeals so that it may determine whether to remand for a new trial on damages, or whether to suggest a remittitur.
[some citations omitted]
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1 Texas Supreme Court: Insurance Coverage Dispute Involving a $1.5 Million Arbitration Award « Disputing // Nov 5, 2009 at 2:59 pm
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