Court Opinion

ID: 9769259
Source: CourtListenerOpinion
Date Created: 2023-08-29 14:42:11.089967+00
Date Added: 2024-06-11T15:36:24.196988
License: Public Domain

*463Concurring opinion by
OWEN, Justice,
in which ABBOTT, Justice, joins.
I concur in the judgment of the Court. I write separately because the Court’s opinion does not make it clear that the test of “inherently undiscoverable” and “objectively verifiable” is not determinative in every ease. There may be instances where these elements are present, but limitations should not be deferred because of other considerations. Conversely, there will be instances where the running of limitations should be deferred even though the injury is not “inherently undiscoverable” or “objectively verifiable”, such as some cases where fraud, fraudulent concealment, fiduciary duty or other special relationships are implicated.
The Court’s formulation of a two-step inquiry should not be read as the acid test whenever the discovery rule is invoked.
I
It could be inferred from today’s decision that if the injury is inherently undiscoverable and objectively verifiable, no other factors are to be considered. The discovery rule will apply. However, in certain circumstances, the injury may be inherently undiscoverable and objectively verifiable, yet there are valid reasons to refrain from applying the discovery rule.
This may arise in a trade secret case. The Court defines “inherently undiscoverable” as “not ordinarily discoverable, even though due diligence has been used.” 918 S.W.2d at 456. A company with hundreds or thousands of employees and dozens of competitors may not have any means of keeping track of where its former employees find other positions. Would a misappropriation by a former employee under such circumstances be “ordinarily discoverable”? Not in every case. Does “due diligence” require such an employer constantly to monitor and attempt to reverse engineer all of the products of all of its competitors to ferret out misappropriation of trade secrets? It is obvious the answer is no. Nevertheless, the discovery rule should not be applied in such cases, even though the injury is inherently undiscoverable, because there are other considerations mitigating against its application. The Court relies on those considerations in its decision. See id. at 455.
The Court concludes that the owner of a trade secret is in the best position to guard against theft of the information in the first place and should be required to do so. Id. at 458. The Court recognizes that many owners of intellectual property take extensive precautions to prevent the occurrence of theft or misappropriation. Id. at 456. It also acknowledges that we live in a world of high employee mobility and that the prospect of misappropriation is not a remote one. Id. at 457. The Court further concludes that vigilance in the area of trade secrets is required, particularly because all ownership of a trade secret is lost once it is made public. Id. at 457.
This case could easily have provided an example of a situation where the injury is inherently undiscoverable and objectively verifiable. The conclusion that the misappropriation was not “inherently undiscovera-ble” is a close call. At trial, Altai stipulated that Computer Associates did not know or have reason to know of the alleged misappropriation within the two-year period of limitations. The facts tend to bear this out. Computer Associates’ former employee purloined computer source code listings. He copied approximately thirty percent of these source code listings to create an operating system compatibility component for Altai. However, this operating system compatibility component was not capable of functioning as a separate product and could not be marketed as a separate product. Rather, Altai used it to facilitate the operation of some of its computer programs. It was these programs that were in competition with Computer Associates’ products. After the misappropriation was discovered by Computer Associates and suit was brought, Altai ceased using the component designed by Computer Associates’ former employee. Altai nevertheless was able to create a new system compatibility component for its programs that did not use any of Computer Associates’ trade secrets. These facts indicate that it would have been *464difficult, if not impossible, for Computer Associates to unearth the misappropriation simply by monitoring its competitors’ products. But, regardless of whether the misappropriation of the trade secret in this case was inherently undiscoverable, I would not apply the discovery rule because of the other factors identified by the Court militating against deferring limitations.
II
The application of the “inherently undis-coverable” and “objectively verifiable” analysis also proves troublesome in cases involving a fiduciary duty or other special relationship. Indeed, even as the Court embraces its two-pronged inquiry, the Court struggles to reconcile that test with our decisions in the fiduciary arena. The Court asserts that we simply must presume the injury is inherently undiscoverable, whether it is or not, in fiduciary situations. 918 S.W.2d at 456. The Court reasons that fiduciaries are presumed to have superior knowledge and that this is only “a variation on the inherently undiseov-erable element.” Id. at 456. But this cannot explain some of our previous decisions where we deferred the running of limitations.
In eases where a lawyer has been sued by a client, we have not grounded our decisions on the notion that the injury was inherently undiscoverable or objectively verifiable, or even on the concept that the lawyer possessed superior knowledge. We have recognized that policy considerations and the fiduciary obligation owed by an attorney to a client may require the deferral of the running of limitations in some eases, even where the alleged negligence was actually known or could have been discovered before the statutory period of limitations would otherwise have run.
In Sanchez v. Hastings, 898 S.W.2d 287 (Tex.1995), we articulated two reasons for deferring limitations, even though the client was fully aware of the alleged malpractice. 898 S.W.2d at 288. We said the client should not be forced to assert a claim against its lawyer until the litigation in which the lawyer was allegedly negligent had concluded. Id. Otherwise, the client might be required to take an inconsistent position. Id. We further recognized that requiring a client to scrutinize every stage of a case its lawyer was handling or risk losing a malpractice claim by operation of limitations would erode the trust between client and lawyer. Id. See also Willis v. Maverick, 760 S.W.2d 642, 645-46 (Tex.1988) (discovery rule applied even though failure to include provision in divorce settlement requiring wife’s consent to sale of family home was apparent from the face of the agreement).
Finally, the analysis employed today by the Court should not govern at least some cases where fraud or fraudulent concealment is alleged. There have been no such allegations in this case, however.
Ill
Our Court has labored to bring clarity, consistency and predictability to our discovery rule jurisprudence, but we have not always been successful. In now articulating what we consider to be the unifying principles, we must also wrestle with some of our prior decisions in cases other than those concerning fraud, fraudulent concealment, a fiduciary duty, or other special relationship. Neither the rationale nor the results in certain of our discovery rule cases can be brought into line with the “inherently undis-coverable” and “objectively verifiable” analysis. This does not cut against utilizing this two-pronged inquiry. Generally, with the qualifications noted above, the “inherently undiscoverable” and “objectively verifiable” test is a good yardstick and should be adopted prospectively. However, we should be candid in admitting that when we apply it to some of our earlier decisions, they do not measure up.
Weaver v. Witt, 561 S.W.2d 792 (Tex.1977), is one such ease. Weaver’s nerves and muscles were damaged during a hemorrhoidecto-my, and he lost control of his bowels. 561 S.W.2d at 793. He did not bring suit against the physician who performed the operation until almost five years later. Id. On appeal from a summary judgment in favor of the physician, we first held that Weaver had offered no proof of fraudulent concealment and that summary judgment was proper on that issue. Id. However, we held that sum*465mary judgment was not proper as to the discovery rule because the only evidence offered by the doctor was the last date of treatment. Id. at 794. If “inherently undis-coverable” were the proper inquiry in discovery rule cases, the doctor’s evidence would have been enough to defeat summary judgment. Weaver certainly knew of his injury, and he knew it occurred following surgery in the same area of his body.
Similarly, in Hays v. Hall, 488 S.W.2d 412 (Tex.1972), the injury was not inherently un-discoverable, but we applied the discovery rule. 488 S.W.2d at 414. Dr. Hall performed a vasectomy on Hays. Id. at 413. Hays learned his wife was pregnant fourteen months afterwards. Id. Dr. Hall tested Hays both before and after this pregnancy, and told Hays he was sterile. Hall’s explanation of Mrs. Hays’s pregnancy was that live sperm cells had been trapped in Mr. Hays’s seminal tract above the vasectomy incision. Id. Mrs. Hays became pregnant yet again, and Dr. Hall conducted still another test, again informing Hays that he was sterile. Id. Hays filed suit almost three years after his operation, and the trial court sustained Dr. Hall’s special exceptions and dismissed the case based on limitations. Id. We held that one who has a vasectomy and is told after tests that he is sterile, cannot know that he is still fertile until either his wife becomes pregnant or he is shown to be fertile by further testing. Id. at 414. However, competent testing easily could have revealed whether the vasectomy was successful well within the limitations period. Moreover, Mrs. Hays became pregnant within the two year limitations period. Id. at 413. The injury was not inherently undiseoverable. We nevertheless remanded the ease for trial and a determination of the date Hays discovered the true facts concerning the failure of the operation or the date he should have discovered its failure in the exercise of ordinary care and diligence. Id. at 414.
In Nelson v. Krusen, 678 S.W.2d 918 (Tex.1984), the injury was not inherently undis-coverable. Yet, we held unconstitutional an application of article 5.82, section 4 of the Insurance Code1 which barred use of the discovery rule. 678 S.W.2d at 923. The Nelsons’ first child was bom with Duchenne muscular dystrophy. Id. at 919-20. When Mrs. Nelson became pregnant a second time, the Nelsons sought genetic counseling from Dr. Krusen to determine if she was a genetic carrier. Id. at 920. After conducting tests, Dr. Krusen said she was not, and the couple went forward with the pregnancy. Id. The Nelsons learned that Dr. Krusen’s diagnosis was incorrect when this child was found to have muscular dystrophy just after his third birthday. Id. The Nelsons alleged that competent testing would have indicated Mrs. Nelson was a genetic carrier. See id. at 919. We therefore cannot say the injury was inherently undiseoverable.
Nelson v. Krusen also fails to meet the second prong of the test in Altai if we apply the rationale of another case decided today, S.V. v. R.V., — S.W.2d - (Tex.1996). Nelson v. Krusen was a medical misdiagnosis case, requiring expert testimony to establish the negligence. Nelson, 678 S.W.2d at 919-20. Under S.V. v. R.V., this medical misdiagnosis would not be “objectively verifiable”. Nelson is also at odds with one of our decisions that preceded it, Robinson v. Weaver, 550 S.W.2d 18 (Tex.1977) (misdiagnosis of location of herniated disc). We held in Robinson that the discovery rule does not apply in eases of medical misdiagnosis because there is no physical evidence that in and of itself establishes negligence. 550 S.W.2d at 22.
The point is that we have not been consistent in each and every one of our decisions. We should take this opportunity to inject consistency into the discovery rule area, to the extent reasonably possible, but also to recognize explicitly that the rationale of some of our earlier decisions does not fit within the analysis articulated today in Altai.
The two-part inquiry set out in Altai is not appropriate in some cases where fraud, fraudulent concealment, a fiduciary duty, or some other special relationship is implicated. In other cases the “inherently undiscovera-ble, objectively verifiable” analysis should be *466the threshold inquiry. Even then, the discovery rule may not apply because of other countervailing considerations. For the foregoing reasons, I concur in the judgment in this case.

. Acts 1975, 64th Leg., R.S., ch. 330, § 4, 1975 Tex.Gen.Laws 864, 865-66, repealed by Acts 1977, 65th Leg., R.S., ch. 817, § 41.03, 1977 Tex.Gen.Laws 2039, 2064.