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 NO. 07-08-0450-CV 

IN THE COURT OF APPEALS 

FOR THE SEVENTH DISTRICT OF TEXAS 

 AT AMARILLO 

 PANEL E 

FEBRUARY 2, 2010 

 ______________________________ 

CORNWALL PERSONAL INSURANCE AGENCY, INC., 

RONALD J. HETTLER, AND ROBIN HETTLER, APPELLANTS 

 v. 

ROBERT N. NEBB, MICHAEL CARPER, AND THE LAW 

OFFICES OF MICHAEL CARPER, P.C., APPELLEES 

 ________________________________ 

FROM THE 237TH DISTRICT COURT OF LUBBOCK COUNTY; 

NO. 2006-537,428; HON. SAM MEDINA, PRESIDING 

 _______________________________ 

Before CAMPBELL and PIRTLE, JJ., and BOYD, S.J.1

MEMORANDUM OPINION 

 This appeal arises from a take-nothing summary judgment in favor of appellees 

Robert N. Nebb (Nebb), Michael H. Carper, and the Law Offices of Michael H. Carper, 

P.C. (Carper), in a suit filed by appellants Cornwall Personal Insurance Agency, Inc. 

(CPI), and Ronald J. Hettler and Robin Hettler against appellees. In the suit, appellants 

alleged that Nebb was guilty of legal malpractice and violations of the Texas Deceptive 

1 John T. Boyd, Chief Justice (Ret.), Seventh Court of Appeals, sitting by 

assignment. Tex. Gov=t Code Ann. '75.002(a)(1) (Vernon). 
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Trade Practices Act (DTPA) for which Carper was vicariously liable because at all 

relevant times Nebb was employed by Carper. Appellees initially responded to the suit 

by a general denial and by asserting affirmative defenses including res judicata and 

judicial estoppel. 

Subsequent to the filing of their answer, appellees filed a motion seeking summary 

judgment. As grounds for that motion, they argued: 1) res judicata, as a matter of law, 

barred all claims; 2) judicial estoppel, as a matter of law, barred all claims; 3) the statute of 

limitations and the professional services exemption barred the DTPA claims; 4) as a 

matter of law, Nebb was not negligent with regard to certain alleged failures to object to 

jury questions; and 5) as a matter of law, there was no proximate cause on appellants=

allegations that Nebb failed to preserve error on matters relating to a Daubert/Robinson 

challenge to expert witness testimony and to jury questions submitted in the course of that 

trial. Prior to the time the summary judgment motion was set for hearing, appellants 

non-suited their DTPA claims. After the hearing, and without specifying its reasons for 

doing so, the trial court granted the motion and rendered a take-nothing summary 

judgment. 

 Background 

In the 1997 suit underlying the one giving rise to this appeal, William David 

Brenholtz filed suit against CPI and the Hettlers (the Brenholtz suit) seeking the recovery 

of various damages suffered as the result of an alleged wrongful termination of his 

employment relationship with them. The ensuing jury trial resulted in a March 22, 2002 

judgment against the Hettlers and CPI. 
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Subsequent to the judgment, and on April 12, 2002, CPI filed a Chapter 11 

bankruptcy proceeding, as did the Hettlers on April 15, 2002. In doing so, they were 

assisted by Nebb in the selection and employment of their bankruptcy counsel. In those 

proceedings, appellees filed a proof of claim for the unpaid balance of Nebb=s fees for 

representing appellants in the Brenholtz suit which resulted in the payment of those fees. 

In the bankruptcy schedules listing all of appellants= assets and liabilities, although they 

included a potential legal malpractice claim against another attorney who had 

represented them in the Brenholtz suit prior to Nebb=s employment in that suit, they did 

not list any potential claim against any appellees. Ultimately, the bankruptcy court 

approved reorganization plans submitted by appellants which resulted in the payment of 

the Brenholtz judgment and the ultimate closure of the Hettlers= bankruptcy on July 26, 

2006, and that of CPI on June 24, 2004. 

In July of 2005, with pleadings signed by Nebb, appellants filed a bill of review 

proceeding in the 364th District Court of Lubbock County in which they sought a review of 

the Brenholtz suit on the basis that, in a related lawsuit against the Travelers Insurance 

Company, they had discovered information that had not been revealed by Brenholtz, and 

which, they alleged, would have made a difference in the original suit. Appellee Nebb 

represented appellants in that proceeding. In that suit, despite Nebb=s testimony that 

such an imposition was not justified, sanctions were assessed against appellants on the 

basis that appellants had not exercised due diligence in bringing the newly discovered 

evidence to the attention of the court. 

The suit against appellees, which gives rise to this appeal, was filed on December 

12, 2006, over four years after the trial of the Brenholtz suit, two years after the close of 
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the CPI bankruptcy, and some six months after the close of the Hettler bankruptcy. 

Appellants assert the suit could not have been filed sooner because it was not until the fall 

of 2006, when they consulted another attorney, that they then learned that some of the 

alleged acts and omissions of Nebb in the Brenholtz suit might constitute malpractice. 

They also argue that until that time, they had reasonably relied upon Nebb=s 

representations that he had done nothing that led to the adverse judgment in the 

Brenholtz case but that they might have a malpractice claim against another attorney who 

earlier represented them in the suit. 

 Discussion 

In pursuing their appeal, appellants present six issues for our review. However, 

because it is determinative of this appeal, it is only necessary for us to discuss their first 

issue. In that issue, appellants argue the trial court erred in rendering summary 

judgment on the basis of res judicata.

The standards by which summary judgments are reviewed are by now axiomatic. 

When reviewing a summary judgment, the reviewing court takes as true all evidence 

favorable to the nonmovant, and resolves any doubts and indulges any reasonable 

inferences in the nonmovant=s favor. South Plains Switching, Ltd. v. BNSF Ry. Co., 255 

S.W.3d 690, 699 (Tex. App.BAmarillo 2008, pet. denied). The summary judgment is 

reviewed de novo, and when the trial court=s order does not specify the ground or grounds 

relied upon for its ruling, it will be affirmed if any of the theories advanced are meritorious. 

Id. 

 Res Judicata
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Appellees argue that any legal malpractice claim against them because of Nebb=s 

representation of appellants in the Brenholtz suit is barred by the res judicata doctrine. 

In doing so, they point out that they filed a proof of claim in the bankruptcies seeking to 

collect unpaid legal fees for services rendered by Nebb in the Brenholtz suit. That being 

true, they argue, any claims for legal malpractice were compulsory counterclaims in those 

bankruptcies, and appellants= failure to assert any such claim in response to Nebb=s quest 

for payment of legal services rendered in those suits precludes them from making any 

such claim now. Parenthetically, appellees acknowledge that inasmuch as they 

presented a traditional summary judgment motion, they carried the burden of proving 

each element of res judicata as a matter of law. Joachim v. Travelers Ins. Co., 279 

S.W.3d 812, 815 (Tex. App.BAmarillo 2008, pet. granted). 

Res judicata, sometimes referred to as Aclaim preclusion,@ prevents parties and 

their privies from relitigating a cause of action that has been fully adjudicated as well as 

any claims or defenses that through diligence should have been litigated but were not. 

The doctrine is intended to prevent causes of action from being split, thus curbing 

vexatious litigation and promoting judicial economy. Ingersoll-Rand Co. v. Valero 

Energy Corp., 997 S.W.2d 203, 206-07 (Tex. 1999). Even so, the doctrine does not bar 

a former defendant who did not assert an affirmative claim for relief in an earlier action 

from stating a claim in a later action that could have been filed as a cross-claim or 

counterclaim in the earlier action, unless the claim inclusion was compulsory in the earlier 

action. Id. at 207. 

In supporting their claim that res judicata is applicable, appellees point to the 

undisputed facts that a proof of claim for unpaid attorney=s fees was filed in the 
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bankruptcies, that those unpaid attorney=s fees related to work performed by Nebb in 

defending the Brenholtz lawsuit, that no contest was made to the payment of that claim, 

that the bankruptcy court authorized the payment of those fees, and that they were paid 

by appellants. 

Noting the Fifth Circuit Court of Appeals holding In re Intelogic Trace, Inc., 200 

F.3d 382 (5th Cir. 2000), appellants recognize that res judicata of a compulsory 

counterclaim may apply to claims made in bankruptcy. However, in doing so they point 

out that court=s caveat: 

Even if the two actions are the same under the transactional test, res 

judicata does not bar this action unless [plaintiff] could and should have 

brought its malpractice claims in the former proceedings. 

 * * * 

In reaching our determination, we consider whether and to what extent 

[plaintiff] had actual or imputed awareness prior to the fee hearing of a real 

potential for claims against Ernest & Young such as those asserted by the 

Trustee and whether the bankruptcy court possessed procedural 

mechanisms that would have allowed [plaintiff] to assert such claims. 

Id. at 388. 

In considering the Intelogic court=s teaching, appellants argue that while the 

bankruptcy court did possess procedural mechanisms that would have allowed them to 

assert malpractice claims against appellees, they had presented fact issues as to 

whether they had actual or implied notice of a real potential for claims against appellees 

prior to the bankruptcy court=s plan confirmations in October 2003. Thus, it was 

necessary to determine those fact questions before it could be determined if their claim 

against appellees for legal malpractice was a compulsory counterclaim in the bankruptcy 
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proceeding. That being so, they contend, any application by the trial court of the res 

judicata doctrine would constitute reversible error. 

Appellants= argument requires us to examine in some detail the implications of 

Texas Rule of Civil Procedure 97(a), the compulsory counterclaim rule. A counterclaim 

is compulsory if 1) it arises out of the transaction or occurrence that gives rise to the 

opposing party=s claim; 2) it is mature and owned by the counter-claimant; 3) it is against 

an opposing party in the same capacity; 4) it does not require third parties who cannot be 

brought into the suit; 5) it is within the court=s jurisdiction; and 6) it is not pending 

elsewhere. Tex. R. Civ. P. 97(a); Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245, 247 

(Tex.1988); South Plains Switching, Ltd. v. BNSF Ry. Co., 255 S.W.3d at 699. If a claim 

meets those elements, it must be asserted in the initial action and cannot be later raised. 

Id.

In the seminal case of Ogletree v. Crates, 363 S.W.2d 431, 435 (Tex. 1963), the 

court instructed that A[t]he rule of res judicata in Texas bars all litigation of all issues 

connected with a cause of action or defense which, with the exercise of diligence, might 

have been tried in a former trial, as well as those that were actually tried.@ Appellants 

argue that even if their legal malpractice claim would otherwise have been a compulsory 

counterclaim to appellees= bankruptcy court claim for attorney fees, because they have 

raised fact issues concerning when they knew, or in the exercise of reasonable diligence 

should have known that they had a cause of action against appellees, the AOgletree rule@

required determination of that question before the compulsory counterclaim rule would 

have come into play. They also contend that they had raised fact issues as to whether 
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their cause of action against appellees accrued long after appellees= claims for attorney’s 

fees had been approved by the bankruptcy court. Thus, they argue, the compulsory 

counterclaim rule was not applicable and prevented any application of the res judicata

doctrine to bar their legal malpractice claims. 

In deciding appellants= due diligence and accrual arguments, we note the court=s 

decision in Bailey v. Travis, 622 S.W.2d 143 (Tex. App.BEastland 1981, writ ref=d n.r.e.). 

In that case, as we are here, the court was also considering three underlying cases2

 and 

questions as to implications of the compulsory counterclaim rule and imposition of res 

judicata by the trial court. Because that court=s reasoning and disposition of those 

questions is instructive and determinative here, we must discuss that case at some 

length. 

2

The three cases involved here are: 1) the Brenholtz case during which the 

alleged malpractice occurred; 2) the bankruptcies in which the attorney=s fees were 

approved; and 3) this case involving alleged legal malpractice. 
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In Bailey, the court opined that the question for its determination was whether a 

legal malpractice claim had Amatured@ so as to be a compulsory counterclaim in an earlier 

suit filed by an attorney against a former client for attorney=s fees. Like the case before 

us, Bailey involved three underlying cases. In Bailey 1, Bailey had been represented by 

attorney William Travis (Travis) and the case had resulted in a judgment adverse to 

Bailey. Following the trial, Bailey employed a different attorney to prosecute an appeal. 

Travis then sued Bailey (Bailey II), and recovered a judgment for attorney=s services 

performed by him in Bailey I. Bailey did not file a counterclaim urging legal malpractice in 

the Bailey II suit. Subsequently, Bailey sued Travis (Bailey III) seeking damages for 

alleged legal malpractice during the trial of Bailey I. The trial court rendered summary 

judgment against Bailey in Bailey III which gave rise to the appeal discussed by the 

appellate court. 

In its discussion, the appellate court noted that the narrow issue to be decided by it 

was whether Bailey=s malpractice claim was Amature@ when he was sued by Travis for 

attorney=s fees in Bailey II. If it was, the court observed, than the summary judgment 

was proper because Bailey had failed to file a compulsory counterclaim under Texas Rule 

of Civil Procedure 97(a). Id. at 143-44. 

In pursuing his appeal, Bailey contended that the malpractice claim was not 

mature at the time he answered in Bailey II, because Bailey I was on appeal and it was 

therefore unsettled as to what damages, if any, he might have suffered as a result of 

Travis= malpractice. Id. That argument and the facts underlying it are significantly 

similar to those advanced here by appellants. 
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In affirming the trial court=s summary judgment, the appellate court opined that the 

maturity of a counterclaim was not Anecessarily equivalent to >accrual= of a malpractice 

cause of action for statute of limitations purposes.@ Id. at 144. Even so, it continued, 

Bailey had Aclearly@ suffered harm when the trial court judgment was entered against him 

in Bailey I and he was forced to appeal that decision, and it was not necessary that the full 

extent of the damages be known at that time. Id. Thus, the court concluded, it was 

apparent at the time he filed his answer in Bailey II, Bailey had been damaged or harmed 

as a result of the alleged malpractice and his claim for damages resulting from that 

alleged legal malpractice had ripened into an enforceable cause of action even though 

the full extent of his damages might not have been known. Id. 

Likewise, in the case before us, appellants had clearly suffered harm when they 

suffered the adverse judgment in the Brenholtz suit. Thus, any right of action against 

appellees for legal malpractice had accrued at the time appellees made claims in the 

bankruptcy court for attorney=s fees rendered in the Brenholtz suit. That being so, any 

legal malpractice claim by appellants became a compulsory counterclaim at that time. 

The failure to assert that compulsory counterclaim timely prevents it being raised again in 

the suit underlying this appeal. 

Thus, the trial court correctly concluded that res judicata was applicable to 

appellants= claims here. That decision requires us to overrule appellants= first issue, and, 

because res judicata was properly applicable, it supports the trial court=s judgment and 

obviates the necessity for discussion of appellants= other issues. The judgment of the 

trial court must be, and is, hereby affirmed. 
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John T. Boyd 

 Senior Justice