Opinion filed December 21, 2017

In The

Eleventh Court of Appeals

No. 11-12-00201-CV

DLA PIPER LLP (US), Appellant

V.

CHRIS LINEGAR, Appellee

On Appeal from the 201st District Court

Travis County, Texas

Trial Court Cause No. D-1-GN-10-000789

O P I N I O N O N R E M A N D

This court previously determined that Chris Linegar lacked standing to bring 

suit against DLA Piper LLP (US); however, the Texas Supreme Court granted 

Linegar’s petition for discretionary review, determined that Linegar did have

standing to sue DLA Piper for legal malpractice, and remanded the cause to this 

court to address the remaining issues. Linegar v. DLA Piper LLP (US), 495 S.W.3d 
2

276 (Tex. 2016), rev’g 507 S.W.3d 768 (Tex. App.—Eastland 2014). We now

affirm the trial court’s judgment.

1

Linegar, an Australian financier and investor, formed a company called Key

Ovation. He later divided that company into two companies: Key Ovation, LLC

and IdentiPHI, LLC, both of which were based in Austin, Texas. In 2008,

IdentiPHI, LLC merged with Saflink Corporation, a Seattle company. In the

merger, Saflink was represented by DLA Piper, and IdentiPHI, LLC was represented

by Akin & Almanza. IdentiPHI, Inc. (IdentiPHI) was the name of the merged 

company, and Linegar was a major stockholder in that company. After the merger, 

DLA Piper represented IdentiPHI as corporate counsel.

During the merger process, it became apparent that IdentiPHI needed capital 

to stay in business while it attempted to secure permanent financing. Linegar

proposed a “bridge loan” from his superannuation fund (a self-managed retirement

trust) in Australia. Linegar, as chairman, director, and majority shareholder of

Zaychan Pty Limited, an Australian corporation that served as trustee for the 

retirement fund, arranged for a bridge loan of 1.75 million Australian dollars

(AUD)—which was equivalent to approximately 1.64 million U.S. dollars (USD)—

from the retirement fund. In conjunction with the bridge loan, IdentiPHI executed a 

promissory note on March 12, 2008; the promissory note contained a clause granting 

Zaychan a security interest in all of IdentiPHI’s assets. The note was payable on or 

before June 29, 2008.

Prior to the execution of the note, Linegar attended a dinner party with the 

board members of IdentiPHI and several other individuals. Linegar claimed that 

he sat next to Michael Hutchings, a partner at DLA Piper, and that they discussed

 

1We note that this case was transferred to this court from the Third Court of Appeals under a docket 

equalization order. See TEX. GOV’T CODE ANN. § 73.001 (West 2013); see also TEX. R. APP. P. 41.3 

(regarding controlling precedent).
3

Linegar’s concerns regarding the bridge loan. Linegar testified that Hutchings

assured him that his security interest was not at risk and that “everything would be

taken care of.” Linegar testified that he believed that DLA Piper represented him 

in connection with the loan. DLA Piper did not disclose to Linegar that it was not

representing him and that his interests were adverse to IdentiPHI’s interests.

In mid-June, Linegar became concerned that IdentiPHI was not going to pay 

back the loan by June 29. He consulted with Rick Akin of Akin & Almanza 

regarding his options in the event that he had to “call up the loan.” Akin

discovered that DLA Piper had not filed the UCC-1 financing statement; thus,

Zaychan’s security interest had not been perfected. Due to strict regulations on

making loans from superannuation funds in Australia, the loan had to be paid back

by June 30, 2008. In order to mitigate his loss and to keep his superannuation fund 

in compliance with Australian law, Linegar took out a mortgage on his home and 

repaid his superannuation fund. Zaychan assigned the note to Key Ovation, and 

Key Ovation amended the note to extend the payment deadline. Key Ovation then 

filed the UCC-1 financing statement. Key Ovation also issued a promissory note

to Linegar in which Key Ovation was required to pay Linegar the amount of the

original loan if and when Key Ovation collected on the loan from IdentiPHI.

Cash-strapped, IdentiPHI ultimately filed for bankruptcy. Key Ovation 

recovered $150,000 (USD) of the $1.75 million (AUD) loan and gave that money 

directly to Linegar “[b]ecause it was his money.” Key Ovation and Linegar did not

pursue the full amount of the note in the IdentiPHI bankruptcy because the security

interest was subject to attack due to its belated perfection. 

Linegar, Zaychan, and Key Ovation sued DLA Piper and Hutchings for legal 

malpractice, negligent misrepresentation, breach of fiduciary duty, breach of 

contract, unjust enrichment, and deceptive trade practices. They claimed that DLA 

Piper and Hutchings advised Linegar individually regarding the loan, including 
4

assuring him that it would be perfected, and they sought actual and punitive

damages. Zaychan’s claims were dismissed with prejudice on summary judgment. 

Key Ovation filed a notice of nonsuit in which it dismissed its claims without

prejudice. Linegar’s claims against DLA Piper and Hutchings proceeded to a jury

trial. However, in order to simplify the jury charge, Linegar nonsuited his claims 

against Hutchings. The jury found for Linegar on his claims of negligent failure

to warn, negligent misrepresentation, fraud by failure to disclose, legal malpractice,

and breach of fiduciary duty. The jury found damages in the amount of $1,293,606

and apportioned 90% responsibility to DLA Piper, 10% to Linegar, and 0% to 

Akin & Almanza. Based on the jury’s verdict, the trial court rendered judgment for

Linegar in the amount of $1,164,245.40, plus interest.

Because DLA Piper’s first issue on appeal challenging Linegar’s standing has 

been resolved in Linegar’s favor, we address Issues Two through Eight in this opinion 

on remand. In its second issue, DLA Piper asserts that the trial court erred when it

excluded evidence and refused jury questions regarding the conduct of Zaychan and

Key Ovation, which DLA Piper asserts are responsible third parties. In the third 

issue, DLA Piper contends that the trial court erred when it admitted a Washington

rule of professional conduct regarding a lawyer’s obligations to non-clients when the

Washington rule varied from Texas law. In the fourth issue, DLA Piper contends that

the trial court erred when it admitted certain evidence regarding SEC filings yet 

excluded other evidence regarding SEC filings. In its fifth issue, DLA Piper 

complains that the trial court erred when it lumped Linegar’s claims into one 

question in the jury charge even though the damages flowed from three distinct

drawdowns on the loan. In the sixth and seventh issues, DLA Piper challenges the 

legal sufficiency of the evidence to show that an agreement existed between DLA

Piper and Linegar to form an attorney-client relationship and to show the existence 

of any negligent misrepresentation or fraudulent omission on the part of DLA 
5

Piper. In its final issue, DLA Piper urges that the amount of damages awarded to 

Linegar was excessive.

In its second issue, DLA Piper contends that it should have been permitted to 

introduce evidence and obtain jury findings on the responsibility of both Zaychan and 

Key Ovation for the harm suffered by Linegar. See TEX. CIV. PRAC. & REM. CODE 

ANN. ch. 33 (West 2015). DLA Piper asserts that Zaychan is a responsible third party 

because, as trustee of Linegar’s superannuation fund, Zaychan violated its duties under 

Australian law when it loaned money to IdentiPHI. DLA Piper asserts that Key 

Ovation is a responsible third party because it “accepted less than 10% of the Note’s 

value in an unreasonable settlement.”

A responsible third party is “any person who is alleged to have caused or 

contributed to causing in any way the harm for which recovery of damages is sought.” 

Id. § 33.011(6). “The trier of fact, as to each cause of action asserted, shall determine 

the percentage of responsibility . . . with respect to each person’s causing or 

contributing to cause in any way the harm for which recovery of damages is 

sought . . . .” Id. § 33.003(a). As pointed out by the Texas Supreme Court, this is not 

a suit on the note; it is a suit for legal malpractice and other torts committed by DLA 

Piper during its alleged representation of Linegar. 495 S.W.3d at 280. The harm for 

which damages were sought in this case related to the failure to timely perfect the 

security interest in the note. See, e.g., City Nat’l Bank of Sulphur Springs v. Smith, 

No. 06-15-00013-CV, 2016 WL 2586607, at *7–8 (Tex. App.—Texarkana May 4, 

2016, pet. denied) (mem. op.) (determining that the harm or injury for which recovery 

of damages could be sought in a legal malpractice suit that involved a missed deadline 

under statute of limitations was the loss of the cause of action and holding that “only 

those persons who contributed in causing the loss of [the] cause of action against the 

Bank should be considered by the jury in the proportionate responsibility issue”). 

Thus, only those persons or entities who contributed to causing the untimely perfection 
6

of the security interest in the note are responsible third parties. DLA Piper did not 

assert at trial and does not assert on appeal that Zaychan or Key Ovation contributed 

to the untimely filing of the UCC-1 financing statement.

Additionally, Linegar—not Key Ovation—was responsible for making the 

decision to accept the bankruptcy settlement that DLA Piper contends was 

unreasonable. The reasonableness of that decision, which was based on the advice and 

recommendation of Akin & Almanza, was addressed in depth at trial. In this regard, 

we note that the jury determined that Akin & Almanza’s negligence, if any, did not 

cause the injury in this case.

Neither Zaychan nor Key Ovation is a responsible third party under the 

circumstances in this case. Thus, the trial court did not err when it refused to submit 

jury questions as to their responsibility.

DLA Piper also argues in its second issue that the trial court abused its discretion 

when it excluded evidence regarding Zaychan’s breach of duty under Australian law 

with respect to the loan to IdentiPHI because, but for that breach of duty, Zaychan

would not have made the loan and Linegar would not have suffered any loss. While it 

is true that, if the loan from Linegar’s retirement fund had not been made to IdentiPHI, 

Linegar would not have suffered the loss sued upon in this case, the proffered evidence 

relates to an attenuated cause that is only remotely connected to DLA Piper’s conduct. 

See IHS Cedars Treatment Ctrs. of DeSoto, Tex., Inc. v. Mason, 143 S.W.3d 794, 799–

800 (Tex. 2004) (addressing attenuation of the causal connection between conduct and 

liability).

The decision whether to admit evidence rests within the discretion of the trial 

court, and an appellate court cannot conclude that a trial court abused its discretion 

merely because the appellate court would have ruled differently or because the trial 

court committed an error in judgment. E.I. du Pont de Nemours & Co. v. Robinson, 

923 S.W.2d 549, 558 (Tex. 1995). We cannot hold that the trial court abused its 
7

discretion when it excluded the proffered evidence as irrelevant. See TEX. R. EVID.

401(b) (to be relevant, a fact must be “of consequence in determining the action”). We 

overrule DLA Piper’s second issue on appeal.

In its third issue, DLA Piper argues that the trial court erred when it permitted 

Linegar to introduce into evidence a Washington rule of professional conduct and 

expert testimony based on that rule. The evidence was admitted to show the standard 

of care that applied to Hutchings, who was licensed in the state of Washington. The 

parties did not dispute at trial that the Washington rules would apply to Hutchings’s

conduct.2 The dispute centered on whether the rule and evidence thereon were

admissible into evidence. DLA Piper contended that the rule was not relevant and 

that the evidence was prejudicial in that it allowed Linegar “to use that rule to imply 

a duty that exists and is different from Texas law with regard to negligently failing 

to clarify.” The rule at issue provides as follows: “In dealing with an organization’s 

directors, officers, employees, members, shareholders or other constituents, a lawyer 

shall explain the identity of the client when the lawyer knows or reasonably should 

know that the organization’s interests are adverse to those of the constituents with 

whom the lawyer is dealing.” WASH. RULES PROF’L CONDUCT R. 1.13(f).

We agree with DLA Piper that neither the Washington rules nor the Texas 

rules give rise to a cause of action against a lawyer and that neither state’s rules may

form the basis for civil liability. See id. preamble ¶ 20; TEX. DISCIPLINARY RULES 

PROF’L CONDUCT preamble ¶ 15. However, we disagree with DLA Piper’s 

contention that these rules cannot be used as evidence of a violation of an existing 

duty of care. See WASH. RULES PROF’L CONDUCT preamble ¶ 20 (stating that, “since 

the Rules do establish standards of conduct by lawyers, a lawyer’s violation of a 

 

2We note that the Washington rule at issue is substantially similar to the corresponding Texas rule. 

Cf. WASH. RULES PROF’L CONDUCT R. 1.13(f), with TEX. DISCIPLINARY RULES PROF’L CONDUCT R. 

1.12(e), reprinted in TEX. GOV’T CODE ANN., tit. 2, subtit. G, app. A (West 2013 & Supp. 2017) (Tex. State 

Bar R. art. X, § 9).
8

Rule may be evidence of breach of the applicable standard of conduct”); Two Thirty 

Nine Joint Venture v. Joe, 60 S.W.3d 896, 905 (Tex. App.—Dallas 2001), rev’d on 

other grounds, 145 S.W.3d 150 (Tex. 2004) (applying Texas rules and holding that 

a trier of fact may consider a relevant rule “as evidence of the standard of care and 

breach of the standard”). Moreover, the trial court instructed the jury prior to 

opening statements that a “violation of the [disciplinary] rules does not itself 

establish any liability in this case.” We cannot hold that the trial court abused its 

discretion when it admitted into evidence Rule 1.13 and expert testimony about 

Hutchings’s conduct with respect to that rule. We overrule DLA Piper’s third issue 

on appeal.

In its fourth issue, DLA Piper complains that the trial court erred when it 

permitted Linegar to introduce evidence related to SEC filings made by DLA Piper 

on Linegar’s behalf but refused to permit DLA Piper to introduce evidence that DLA 

Piper made similar SEC filings for other officers and directors of IdentiPHI and that 

those officers and directors did not believe that such filings created an attorney/client 

relationship with DLA Piper. DLA Piper argues that evidence of communications 

between Linegar and DLA Piper that (1) related to SEC filings and (2) were made 

after March 12, 2008, the date of the first drawdown on the note, merely served to 

“confuse and prejudice the jury.” DLA Piper argued similarly at trial, and the trial 

court overruled DLA Piper’s relevance and Rule 403 objections. See TEX. R. EVID. 

401–403.

Although the relevance of several of the e-mails that were dated after 

March 12 and related to SEC filings do not seem to be particularly relevant to the 

issues in this case, we must keep in mind that an appellate court cannot conclude that 

a trial court abused its discretion merely because the appellate court would have ruled 

differently or because the trial court committed an error in judgment. Robinson, 923 

S.W.2d at 558. The jury was asked to determine, in Question No. 5, whether there 
9

was an attorney-client relationship between DLA Piper and Linegar “at any time 

from February 18, 2008 to June 17, 2008,” which was the date of the last drawdown.

Some of the evidence about which DLA Piper complains in this issue was relevant 

to a determination of that question. Evidence of others’ beliefs with respect to their 

relationship with DLA Piper as a result of the SEC filings did not controvert 

Linegar’s testimony and was not relevant to any fact of consequence. Furthermore, 

especially in light of DLA Piper’s inaccurate opening statement,3it was within the 

trial court’s discretion to rule that the probative value of the evidence was relevant 

and was not substantially outweighed by the danger of unfair prejudice, confusion 

of the issues, misleading the jury, or undue delay. See TEX. R. EVID. 401–403. We 

cannot hold that the trial court abused its discretion with respect to the admission 

and exclusion of evidence related to the SEC filings. DLA Piper’s fourth issue on 

appeal is overruled.

In its fifth issue, DLA Piper contends that the trial court erred when it “refused 

to granulate the jury charge” and “lump[ed] the plaintiff’s claims into one question, 

even though the damages flowed from three distinct drawdowns on the loan.” In its 

brief, DLA Piper specifically mentions Question No. 1 (negligent failure to advise 

Linegar that DLA Piper did not represent him), No. 5 (existence of attorney-client 

relationship at any time between February 18 and June 17, 2008), and No. 10

(amount of damages caused by DLA Piper’s conduct).

A trial court “shall, whenever feasible, submit the cause upon broad-form 

questions.” TEX. R. CIV. P. 277. The loss in this case stemmed from DLA Piper’s 

advice to Linegar with respect to the original loan, not from each drawdown 

 

3During his opening statement, counsel for DLA Piper stated:

And by the way, when we talk about e-mails, I want to make one thing very clear. Not 

only were there no letters between my clients and Chris Linegar, ever, there were no emails between my clients and Chris Linegar. DLA Piper never sent Mr. Linegar an e-mail. 

Mr. Linegar never sent DLA Piper an e-mail. 
10

separately. The trial court properly refused to distinguish between the three 

drawdowns in its submission of the charge to the jury.

While we agree with DLA Piper’s assertion that the extended timeframe used 

in Question No. 5 did not properly limit the jury’s consideration of the existence of 

an attorney-client relationship to the occurrence or transaction at issue, we do not 

find that the error in Question No. 5 “probably caused the rendition of an improper 

judgment” or “probably prevented the appellant from properly presenting the case 

to the court of appeals.” TEX. R. APP. P. 44.1(a). We must consider the entire jury 

charge when determining whether an improper charge caused harm. Thota v. Young, 

366 S.W.3d 678, 694 (Tex. 2012). The trial court properly limited the damage 

question, Question No. 10, as follows:

What sum of money, if paid now in cash, would fairly and 

reasonably compensate Chris Linegar for the injury to him, if any, 

caused by the conduct of DLA Piper? 

Consider only the difference, if any, between the 

amount awarded on the Note to Chris Linegar, through 

Key Ovation, in the IdentiPHI bankruptcy and the amount 

Chris Linegar would have received on the Note if not for 

the conduct of DLA Piper.

(Emphasis added). Any damages that stemmed from DLA Piper’s representation of 

Linegar, as found by the jury in answer to Question No. 5, were limited to the injury 

caused by DLA Piper with respect to the note. Because the trial court submitted 

appropriate broad-form questions and because the error in Question No. 5 is not 

reversible, we overrule DLA Piper’s fifth issue.

In its sixth and seventh issues, DLA Piper challenges the legal sufficiency of 

the evidence to support the jury’s answers to some of the liability questions: 

specifically, that DLA Piper and Linegar agreed to form an attorney-client 

relationship and that DLA Piper made a negligent misrepresentation or committed 

fraud by omission. However, DLA Piper does not challenge the sufficiency of the
11

evidence with respect to the jury’s finding that DLA Piper proximately caused injury 

to Linegar by negligently failing to advise Linegar that DLA Piper did not represent 

him, which DLA Piper refers to as “the confusion claim.” The trial court’s judgment 

can be upheld on that theory of liability; therefore, we need not address the merits 

of DLA Piper’s sixth and seventh issues. See TEX. R. APP. P. 47.1; Natho v. Shelton, 

No. 03-11-00661-CV, 2014 WL 2522051, at *1 (Tex. App.—Austin May 30, 2014, 

no pet.); Adams v. Petrade Int’l, Inc., 754 S.W.2d 696, 708–09 (Tex. App.—Houston 

[1st Dist.] 1988, writ denied).

In its final issue, DLA Piper contends that the damages are excessive “given 

that [Linegar’s] damage model was based on a crucial assumption about the funds 

available in bankruptcy court that [Linegar] never proved.” DLA Piper asserts that 

Linegar did not prove that he would have recovered more than an additional 

$587,145 in the IdentiPHI bankruptcy. Although we agree that DLA Piper’s 

assertion would be correct if one was to merely consider the amount of money that 

Linegar would have recovered from the proceeds of the bankruptcy after Passlogix, 

which held a primed security interest due to its bankruptcy loan, was paid. However, 

DLA Piper’s argument does not take into account all of the evidence presented by 

Linegar or the probability that, if Linegar’s security interest had been timely 

perfected, Passlogix would not have been in the picture.

The jury found that the difference between the amount awarded to Linegar on 

the note in the IdentiPHI bankruptcy and the amount that Linegar would have 

received on the note but for DLA Piper’s conduct was $1,293,606. There was some

evidence that, if the security interest had been timely perfected, Linegar would have 

been the “800-pound gorilla” and could have either foreclosed on IdentiPHI’s assets 

or bid on those assets in the bankruptcy proceeding using a credit for the amount of 

debt that was owed to him. The total amount of debt that IdentiPHI owed to Linegar, 

including both the original loan and subsequent additional loans (which were 
12

properly perfected), was approximately $2.1 million, plus interest; IdentiPHI’s 

assets were sold in bankruptcy for $2.35 million. The evidence showed that, had the 

security interest been timely perfected, Linegar could have obtained the $2.35 

million worth of IdentiPHI assets in the bankruptcy sale without taking a penny out 

of his pocket. We cannot hold that the jury awarded excessive damages, and we 

note that the supreme court stated in its opinion in this case: “Had the security 

interest in the March 2008 note to Zaychan been timely perfected, Key Ovation, and 

thus Linegar, would have recovered the full amount due under the note—

approximately $1.67 million.” 495 S.W.3d at 278. We overrule DLA Piper’s eighth 

issue on appeal.

We affirm the judgment of the trial court.

JIM R. WRIGHT

CHIEF JUSTICE

December 21, 2017

Panel consists of: Wright, C.J., 

Willson, J., and Bailey, J.