Court Opinion

ID: 3080031
Source: CourtListenerOpinion
Date Created: 2015-10-16 01:48:13.89726+00
Date Added: 2024-06-11T07:38:24.603165
License: Public Domain

COURT OF APPEALS
                         SECOND DISTRICT OF TEXAS
                              FORT WORTH

                              NO. 02-13-00252-CV

JOSEPH & DEBRA DOMINO                                            APPELLANTS

                                        V.

ALLMAND & LEE, PLLC, CHRIS                                         APPELLEES
LEE, AND WELDON R. ALLMAND

                                     ----------

         FROM THE 48TH DISTRICT COURT OF TARRANT COUNTY
                   TRIAL COURT NO. 048-262694-12

                                     ----------

                                   OPINION

                                     ----------

      Appellants Joseph and Debra Domino sued appellees Allmand & Lee,

PLLC, Chris Lee, and Weldon R. Allmand for legal malpractice, alleging negligent

representation in bankruptcy proceedings from November 6, 2009, to February

24, 2010, when the Dominos’ Chapter 13 case was dismissed. The Dominos

filed their malpractice suit on November 5, 2012.
      The appellees filed traditional motions for summary judgment, arguing that

the Dominos’ sole claim was barred by the two-year limitations period because

their legal representation of the Dominos had ended approximately two years

and eight months before the Dominos filed their legal malpractice lawsuit and

that the Dominos were aware of the damages allegedly suffered on or about

February 24, 2010, when their Chapter 13 case was dismissed. See Tex. Civ.

Prac. & Rem. Code Ann. § 16.003(a) (West 2002 & Supp. 2013); Kimleco

Petroleum, Inc. v. Morrison & Shelton, 91 S.W.3d 921, 924 (Tex. App.—Fort

Worth 2002, pet. denied) (“A legal malpractice claim is a tort and is governed by

a two-year statute of limitations.”). The appellees attached the Dominos’ original

petition to their respective motions.

      In their summary judgment answer, the Dominos responded that the

statute of limitations was tolled in their case under Hughes v. Mahaney &

Higgins, 821 S.W.2d 154 (Tex. 1991), and Apex Towing Co. v. Tolin, 41 S.W.3d

118 (Tex. 2001). They attached a copy of the bankruptcy court’s docket to their

response and argued that limitations began running on July 19, 2011, when they

“were forced to begin liquidation proceedings by converting the [subsequently

filed Chapter 11] case to Chapter 7,” because that was when they “had suffered

from Defendants’ errors in a non-appealable way.”        The bankruptcy court’s

docket shows that a Chapter 11 petition was filed on February 26, 2010, that a

motion to convert the case from Chapter 11 to Chapter 7 was filed on June 11,

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2011, and that the Chapter 7 case was closed on October 10, 2012.1 The trial

court granted the appellees’ motions for summary judgment, and this appeal

followed.

      In a single issue, the Dominos argue that their serial bankruptcy

proceedings had not fully and finally concluded until July 19, 2011, when they

converted their Chapter 11 case to a Chapter 7 case, and that limitations were

tolled under Hughes until that point.        They reference their first Chapter 13

petition, in Case No. 09-46626-dml13, which was dismissed on October 28,

2009; their second Chapter 13 petition, which was filed by appellees in Case No.

09-47153-dml13 and which was dismissed on February 24, 2010; and their

Chapter 11-converted-to-7 petition in Case No. 10-41270-dml7, which was filed

on February 26, 2010, and closed on October 10, 2012.

      Generally, when a cause of action accrues is a question of law. Provident

Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 221 (Tex. 2003); Willis v.

Maverick, 760 S.W.2d 642, 644 (Tex. 1988).           “[W]hen an attorney commits

malpractice in the prosecution or defense of a claim that results in litigation, the

statute of limitations on the malpractice claim against the attorney is tolled until

all appeals on the underlying claim are exhausted.” Hughes, 821 S.W.2d at 157

(emphasis added).     In Hughes, the Hugheses’ counsel made an adoption-

proceeding mistake in 1982 that let the biological mother prevail in the 1985

      1
        The trial court sustained objections to the Dominos’ evidence attached to
their various filings, and the Dominos do not appeal these evidentiary rulings.

                                         3
appeal of the termination-of-parental-rights suit; the supreme court overruled the

Hugheses’ motion for rehearing in that case on July 10, 1985. Id. at 155–56.

The Hugheses sued counsel for malpractice on May 21, 1987, which the

supreme court held remained within limitations because of tolling until the

termination case appeals were exhausted—i.e., July 10, 1985. Id. at 156–58 &

n.6. The court reasoned that if forced to bring the malpractice case while the

termination case proceeded on appeal, the Hugheses would have been forced to

make inconsistent claims, compromising the likelihood of success in both suits;

therefore, “[l]imitations are tolled for the second cause of action because the

viability of the second cause of action depends on the outcome of the first.” Id. at

157; see also Apex, 41 S.W.3d at 121 (referencing Sanchez v. Hastings, 898

S.W.2d 287, 288 (Tex. 1995), for the proposition that attorney-client trust would

be eroded if the client had to scrutinize every stage of a case for possible

missteps while the case proceeded). The supreme court reaffirmed the Hughes

rule in Apex and added that limitations is tolled either until all appeals on the

underlying claim are exhausted “or the litigation is otherwise finally concluded,”

i.e., by settlement and dismissal of appeal. 41 S.W.3d at 118–19, 123 (holding

that the date of the dismissal of appeal after settlement in the underlying suit was

the date that limitations began to run).

      The Dominos argue that the term “finally” with regard to a determination of

whether a case is “finally concluded” should be evaluated case by case “because

for one case it may be completely concluded while the next it could just be a

                                           4
single stage of litigation.”2 They contend that here, any party in interest could

have moved to reinstate the second Chapter 13 bankruptcy case or could have

objected to the final report or trustee’s dismissal and that their new counsel

“could have easily requested that the case be reinstated and then converted to

Chapter 11,” so the second Chapter 13 case was not “fully and finally concluded”

when the case was dismissed on February 24, 2010. They also argue that all of

their appeals were not exhausted in the second case.

      We have found no cases applying Hughes to a second, separate

proceeding as encouraged by the Dominos, and to apply the rule in such a

manner would be contrary to the supreme court’s reasoning set out in Hughes

and Apex:    the Dominos have not articulated why pursuing their malpractice

claim while their Chapter 11 case proceeded with other counsel would have

forced them into the untenable position of having to adopt inherently inconsistent

litigation postures or how their malpractice claim’s viability depended on the

outcome of the unappealed Chapter 13 case. Cf. Fed. R. Bankr. P. 8013 (stating

that on appeal, a district court or bankruptcy appellate panel may affirm, modify,

or reverse a bankruptcy judge’s judgment, order, or decree or remand with

instructions for further proceedings). Further, the record reflects that no one

actually pursued any of the Dominos’ propositions set out above; therefore, the

      2
        The Dominos rely on Guillot v. Smith, 998 S.W.2d 630 (Tex. App.—
Houston [1st Dist.] 1999, no writ), but Guillot is inapposite because, unlike the
case before us here, the Guillot bankruptcy proceeding was a continuation of the
original bankruptcy case, not a new case. See id. at 631–33.

                                        5
particular bankruptcy case in which the alleged malpractice occurred—the

second Chapter 13 case—ended with dismissal, which triggered the beginning of

the limitations period in the malpractice case. Because the limitations period did

not toll under Hughes on these facts, we overrule the Dominos’ sole issue and

affirm the trial court’s judgment.

                                                  /s/ Bob McCoy

                                                  BOB MCCOY
                                                  JUSTICE

PANEL: LIVINGSTON, C.J.; MCCOY and MEIER, JJ.

DELIVERED: July 24, 2014

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