Court Opinion

ID: 4467612
Source: CourtListenerOpinion
Date Created: 2019-12-25 05:14:10.28963+00
Date Added: 2024-06-11T14:35:12.743356
License: Public Domain

IN THE SUPREME COURT OF TEXAS
                                                 444444444444
                                                    NO. 18-0486
                                                 444444444444

BRIAN ERIKSON AND QUILLING, SELANDER, LOWNDS, WINSLETT & MOSER, P.C.,
                             PETITIONERS,

                                                          V.

                                      OSCAR RENDA, RESPONDENT

                4444444444444444444444444444444444444444444444444444
                                 ON PETITION FOR REVIEW FROM THE
                        COURT OF APPEALS FOR THE SEVENTH DISTRICT OF TEXAS
                4444444444444444444444444444444444444444444444444444

                                          Argued September 26, 2019

        JUSTICE GUZMAN delivered the opinion of the Court.

        JUSTICE BLAND did not participate in the decision.

        This attorney-malpractice case requires us to examine the reach of the Hughes tolling rule.1

Long after a corporate officer incurred personal liability for transferring corporate assets in violation

of a federal statute,2 he sued the lawyer who purportedly “blessed” the transactions without warning

him about the collateral consequences. As all agree, the malpractice claim is time-barred unless

        1
Hughes v. Mahaney & Higgins, 821 S.W.2d 154, 157 (Tex. 1991).
        2
            31 U.S.C. § 3713 (the “Priority of Government claims” statute).
limitations was tolled under Hughes, which applies when legal malpractice is committed “in the

prosecution or defense of a claim that results in litigation.”3 If that criteria is satisfied, the statute

of limitations is tolled until all appeals in the “underlying claim” in which the alleged malpractice

occurred have been exhausted or the litigation is otherwise finally concluded, such as by dismissal

or settlement.4

        Hughes tolling is animated by several policy considerations unique to malpractice claims,

but it is a “clear and strict,” “categorical,” and “bright-line rule” applicable only to the category of

legal-malpractice claims falling within the articulated paradigm.5 Though we have not previously

considered the nexus required to come within the Hughes tolling rule, our cases applying the rule

share as a unifying principle that the actions giving rise to the malpractice claim were integrally

connected to the prosecution or defense of a claim. The legal advice at issue here lacks the nexus

required to come within the Hughes tolling rule because it was only incidentally related to the

prosecution or defense of a claim. We therefore reverse the court of appeals’ judgment and render

judgment dismissing the malpractice claim as untimely.

        3
            Hughes, 821 S.W.2d at 157.
        4
         Apex Towing Co. v. Tolin, 41 S.W.3d 118, 119, 123 (Tex. 2001) (underlying litigation was “finally concluded”
when the court of appeals dismissed the pending appeal based on the parties’ settlement); see Hughes, 821 S.W.2d at
156.
        5
            Apex Towing, 41 S.W.3d at 122.

                                                         2
                                                  I. Background

         Oscar Renda’s malpractice suit against Brian Erikson and Quilling, Selander, Lownds,

Winslett & Moser, P.C. (collectively, Erikson) is set against the backdrop of protracted litigation

between Renda Marine, Inc. (Marine) and the United States Government concerning Marine’s

performance under a government dredging contract (the Marine litigation). After Marine was found

liable to the federal government, Renda, as Marine’s president and sole shareholder, transferred

Marine’s assets to various Renda-controlled creditors in 2003. These financial transactions served

as the catalyst for the professional-liability suit Renda filed against Erikson eleven years later.

         The precise details of the Marine litigation are not pertinent to the limitations issue on

appeal, but a brief overview provides helpful context.6 The Marine litigation involved two sets of

claims: (1) Marine’s claims for $14.2 million in additional compensation under its contract to dredge

the Houston–Galveston shipping channel, which were concluded adversely to Marine when appeals

were exhausted in 2008,7 and (2) the federal government’s damages claims against Marine for

incomplete and deficient dredging work, which resulted in a November 26, 2002 administrative

determination that Marine was liable to the government for $11.86 million. Marine’s indebtedness

to the government became final and could no longer be challenged, set aside, or appealed when the

company failed to appeal by November 26, 2003. Erikson represented Marine in prosecuting and

         6
          The factual background of the Marine litigation is fully discussed in numerous federal opinions including
United States v. Renda Marine, Inc., 667 F.3d 651 (5th Cir. 2012), and United States v. Renda, 709 F.3d 472 (5th Cir.
2013).
         7
           See Renda Marine, Inc. v. United States, 509 F.3d 1372 (Fed. Cir. 2007) (reh’g and reh’g en banc denied Mar.
11, 2008); Renda Marine, Inc. v. United States, 71 Fed. Cl. 782 (2006) (denial of motion to reconsider certain prior
rulings); Renda Marine, Inc. v. United States, 66 Fed. Cl. 639 (2005) (merits decision).

                                                          3
defending both sets of claims, and the failure to appeal the November 26, 2002 liability

determination provided the basis for Marine’s malpractice suit against him several years later.

       Renda’s malpractice suit against Erikson arises from legal advice Erikson reportedly

provided in the summer of 2003. At that point, an appeal involving Marine’s claims was pending

in the Court of Federal Claims and its liability on the government’s $11.86 million claims had been

determined but was still appealable. Marine’s financial status was precarious—its liabilities vastly

exceeded its assets, interest on debts continued to accrue, and legal fees were mounting. So,

Marine’s accountant made plans to “clean up” debt the company had incurred through

intra-company loans.

       The accountant—who also represented Renda and Oscar Renda Contracting, Inc. (Renda

Contracting)—had several accounting and tax concerns related to Marine’s debt load, but was

spurred to action when Renda Contracting’s insurer requested that Marine pay off its debt to the

contracting company. The accountant contacted Erikson for advice about two options for resolving

Marine’s debt obligations: Marine could either (1) declare bankruptcy or (2) transfer its assets to

eliminate its debt obligations to various creditors.

       Erikson reportedly rejected the bankruptcy option, but “blessed” the asset-transfer option,

with the caveat that the federal Anti-Assignments Act prohibited Marine from transferring its claims

against the government to a creditor.8 Effective July 31, 2003, the accountant “act[ed] on Erikson’s

advice and approval” by assisting Marine in transferring $8.56 million in assets to Renda, Renda

       8
           See 41 U.S.C § 6305.

                                                  4
Contracting, and other Renda-controlled companies to satisfy Marine’s debts to those creditors.

These transactions left Marine unable to satisfy its liability to the government.

         In 2005, Marine sued Erikson, alleging he committed malpractice in failing to appeal the

November 2002 liability determination based on the erroneous conclusion that the administrative

decision could be collaterally attacked in the then-pending appeal of Marine’s claims. Marine’s

malpractice suit was settled before the year’s end for $2 million, and those funds were transferred

to Renda Contracting to further discharge Marine’s debt obligations. Renda asserts that transaction

was made in reliance on Erikson’s 2003 “blessing” of the earlier asset transfers. When all was said

and done, more than $10.5 million in Marine’s assets were transferred to satisfy its debts to

Renda-related entities.

         Renda maintains that he did not discover until years later that the asset transfers violated a

federal priorities statute obligating debtors to prioritize payments to the federal government when

satisfying debt obligations (the Priority Statute).9 Under the Priority Statute, Renda’s authorization

of the transfer on Marine’s behalf made him personally liable for the company’s debt to the

government in the amount of the transferred assets.10

         The government learned about the asset transfers through Marine’s disclosures in the course

of a 2008 suit to enforce its judgment against Marine. Armed with newly discovered information

about the asset transfers, the government instituted parallel litigation against Renda under the

         9
             See 31 U.S.C. § 3713.
         10
            Id. § 3713(b) (“A representative of a person . . . paying any part of a debt of the person . . . before paying a
claim of the Government is liable to the extent of the payment for unpaid claims of the Government.”).

                                                             5
Priority Statute, alleging he was personally liable for the amount of the 2003 and 2005 financial

transactions because he had authorized the transfers as Marine’s representative when the company

was insolvent and owed a debt to the government (the Priority Suit). Renda was served with the

Priority Suit in August 2009.

         The government’s enforcement action resulted in a judgment against Marine for the full

amount of the administrative award—$11.8 million plus interest.11 Marine appealed, but the Fifth

Circuit affirmed, and the United States Supreme Court denied Marine’s appeal on April 15, 2013.12

         In      the    meantime,      the    government        successfully      obtained      a    $12.54     million

damages-and-interest judgment against Renda in the Priority Suit. The Fifth Circuit affirmed,

holding that for purposes of the Priority Act, the liability determination became “a claim of the

United States Government” when it was issued in November 2002 even though it was not final until

a year later.13 Renda’s appeals in the Priority Suit were exhausted when the Supreme Court denied

certiorari on November 12, 2013.

         Renda paid the Priority Suit judgment, but filed a malpractice suit against Erikson on June

24, 2014, alleging Erikson failed to inform him that the asset transfers on Marine’s behalf would

make him personally liable for satisfying the government’s claim against Marine. The malpractice

suit was filed eleven years after Erikson “blessed” Marine’s asset-transfer plan, nearly five years

         11
           United States v. Renda Marine, Inc., 750 F. Supp. 2d 755 (E.D. Tex. 2010) (rendering judgment on Marine’s
indebtedness to the government and requiring Marine to repay $3 million improperly paid in excess of the original
contract price).
         12
              United States v. Renda Marine, Inc., 667 F.3d 651 (5th Cir. 2012), cert. denied 113 S. Ct. 1800 (2013).
         13
            United States v. Renda, 709 F.3d 472, 481-83 (5th Cir. 2013) (under the Priority Statute, “a claim arising out
of a government contract need not be final to be accorded priority”), cert. denied 134 S. Ct. 618 (2013).

                                                            6
after Renda was served in the Priority Suit, and seven months after appeals were exhausted in the

Priority Suit.

        Erikson moved for summary judgment on the affirmative defenses of limitations and release.

Erikson’s motion asserted Renda’s claims were, as a matter of law, (1) barred by the two-year statute

of limitations and (2) released in the 2005 settlement of Marine’s malpractice claims. Renda

conceded he discovered the alleged malpractice no later than the date he was served with the Priority

Suit, but he argued that Hughes tolling prevented the statute of limitations from commencing until

appeals in that suit were exhausted, which was November 12, 2013. He also argued that the release

he executed on Marine’s behalf in 2005 could not reasonably be construed to encompass his

individual claims.

        The trial court granted summary judgment in Erikson’s favor and rendered a take-nothing

judgment, but the court of appeals reversed and remanded. The court held that fact issues precluded

summary judgment on Erikson’s limitations defense and Renda’s individual claims were not “clearly

within the subject matter of the [2005] release.”14

        On petition for review to this Court, Erikson challenges only the statute-of-limitations ruling.

As to that issue, the court of appeals agreed with other appellate courts in holding Hughes tolling

does not apply to legal malpractice occurring in “mere transactional work.”15 But the court found

disputed fact issues existed about whether Erikson’s asset-transfer “advice pertained to merely

        14
           547 S.W.3d 901, 913, 916 (Tex. App.—Amarillo 2018). The appeal was transferred from the Fort Worth
court of appeals to the Amarillo court of appeals pursuant to a docket equalization order. See TEX. GOV’T CODE
§ 73.001; TEX. R. APP. P. 41.3 (transferee court must apply the precedent of the transferring court).
        15
547 S.W.3d at 910-11.

                                                      7
transactional work or the prosecution or defense of claims” and whether “the group of clients to

whom Erikson gave advice . . . encompassed Renda in his personal capacity.”16

       Regarding the former, the court identified two distinct “claims” that could support Hughes

tolling: (1) the Government’s debt claim against Marine and (2) Renda’s debt claim against

Marine.17 According to the court, Renda’s malpractice claim would be amenable to Hughes tolling

if Renda and the entities related to him sought Erikson’s advice, not merely to facilitate financial

transactions, but in relation to the prosecution and defense of those debt claims.18 The court

concluded that depending on the disposition of the identified fact issues, the malpractice claim, as

alleged, could fall within the tolling rule’s paradigm because Erikson’s approval of the asset transfer

with only a limited qualification resulted in a third-party lawsuit by the government against Renda,

Erikson’s putative client.19 If a jury resolved the issues of fact favorably to Renda, “then limitations

was tolled until the underlying suit (i.e., the Priority Suit) was finally resolved,” making the 2014

malpractice suit timely.

       We granted Erikson’s petition for review to address the scope of the Hughes tolling rule,

which we have had few occasions to revisit since its adoption nearly thirty years ago.

       16
            Id. at 911.
       17
            Id.
       18
            Id.
       19
            Id. at 910-11.

                                                   8
                                                   II. Discussion

         We review summary judgments de novo, viewing the evidence in the light most favorable

to the non-movant, crediting evidence favorable to the non-movant if reasonable jurors could, and

disregarding contrary evidence unless reasonable jurors could not.20 A defendant who moves for

summary judgment based on limitations must conclusively establish the elements of that defense,

including when the cause of action accrued.21 The defendant must also conclusively negate

application of the discovery rule and any tolling doctrines pleaded as an exception to limitations.22

         The statute of limitations for legal malpractice is two years after a cause of action accrues.23

A legal injury is incurred, and a cause of action accrues, when faulty professional advice is taken.24

But because the discovery rule applies to legal-malpractice claims,25 accrual is deferred until the

client discovers, or should discover, the wrongful act and injury.26 By adopting the discovery rule

for legal-malpractice claims, we have accepted that such claims are inherently undiscoverable

         20
              Mann Frankfort Stein & Lipp Advisors, Inc., 289 S.W.3d 844, 848 (Tex. 2009).
         21
              Schlumberger Tech. Corp. v. Pasko, 544 S.W.3d 830, 833-34 (Tex. 2018).
         22
          Id. at 834; Diaz v. Westphal, 941 S.W.2d 96, 97-98 (Tex. 1997); Jennings v. Burgess, 917 S.W.2d 790, 793
(Tex. 1996).
         23
              TEX. CIV. PRAC. & REM. CODE § 16.003(a); Hughes v. Mahaney & Higgins, 821 S.W.2d 154, 156 (Tex.
1991).
         24
              Murphy v. Campbell, 964 S.W.2d 265, 270-71 (Tex. 1997).
         25
              Willis v. Maverick, 760 S.W.2d 642, 646 (Tex. 1988).
         26
              Childs v. Haussecker, 974 S.W.2d 31, 40 (Tex. 1998).

                                                           9
because “‘[i]t is unrealistic to expect a layman client to have sufficient legal acumen to perceive an

injury at the time of the negligent act or omission of his attorney.’”27

        But even applying the discovery rule in this case, Renda concedes his cause of action

accrued, at the latest, in August 2009 when he was served with the Priority Suit. Because that was

nearly five years before Renda sued Erikson, the malpractice suit was untimely unless the equitable

tolling rule we adopted in Hughes v. Mahaney & Higgins applies.28

        In Hughes, we held that “when 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.”29 Renda argues that

“the underlying claim” is the Priority Suit—litigation he says resulted from malpractice occurring

in the prosecution or defense of either the federal government’s debt claim against Marine or his

debt claim against Marine. That being the case, Renda contends the lawsuit was timely because

appeals in the Priority Suit were exhausted and tolling ended less than two years before he sued

Erickson.

        We have substantively addressed Hughes tolling in only a handful of cases,30 but those

opinions have shaped the tolling doctrine into a carefully crafted and narrowly defined rule with

        27
             Willis, 760 S.W.2d at 645 (citation omitted); S.V. v. R.V., 933 S.W.2d 1, 6 (Tex. 1996).
        28
             821 S.W.2d 154 (Tex. 1991).
        29
             Id. at 156.
        30
           Underkofler v. Vanasek, 53 S.W.3d 343, 345-46 (Tex. 2001); Apex Towing Co. v. Tolin, 41 S.W.3d 118,
122-23 (Tex. 2001); Am. Centennial Ins. Co. v. Canal Ins. Co., 843 S.W.2d 480, 483-84 (Tex. 1992); Sanchez v.
Hastings, 898 S.W.2d 287, 288 (Tex. 1995); Gulf Coast Inv. Corp. v. Brown, 821 S.W.2d 159, 160 (Tex. 1991);
Aduddell v. Parkhill, 821 S.W.2d 158, 159 (Tex. 1991); see Murphy v. Campbell, 964 S.W.2d 265, 272 (Tex. 1997)
(accountant malpractice).

                                                           10
established boundaries. Construing the record in the light most favorable to Renda, the legal advice

Erikson provided with respect to Marine’s asset transfers does not fall within the rule’s parameters.

                                          A. Hughes Tolling

        The legal-malpractice suit in Hughes arose from an adoption action and suit to terminate

parental rights. The attorney representing the adoptive parents secured an affidavit of voluntary

relinquishment from the biological mother and filed suit the next day to terminate parental rights.31

The biological mother later revoked the affidavit, but the adoptive parents prevailed in the

termination case nonetheless.32 On appeal, the termination judgment was reversed and the suit

dismissed. The court held that the adoptive parents lacked standing because the attorney had named

himself, and not his clients, as the child’s temporary managing conservator in the relinquishment

affidavit.33

        Many years after the lawyer drafted the defective affidavit, the adoptive parents sued for

malpractice, but the suit was dismissed as untimely. We reversed, holding the suit was not

time-barred because the limitations period was tolled until appeals in the underlying termination

case had finally concluded.34 Adopting what would become the opinion’s eponymous tolling rule,

we found two compelling policy concerns justified an exception to limitations: (1) “the legal injury

and discovery rules can force the client into adopting inherently inconsistent litigation postures in

        31
             Hughes, 821 S.W.2d at 155.
        32
             Id. at 155-56.
        33
             Id.
        34
             Id. at 156-57.

                                                 11
the underlying case and in the malpractice case,” compromising the likelihood of the client’s success

in both suits, and (2) “the viability of the second cause of action [the malpractice case] depends on

the outcome of the first [the one in which the malpractice allegedly occurred].”35 The adoptive

parents’ malpractice claim fit the tolling rule formulated in Hughes because the attorney’s alleged

malpractice (the defective affidavit) had occurred, not while a lawsuit was pending, but in the

prosecution of a claim (for adoption) that resulted in litigation (a parental termination suit), which

was not finally terminated until appeals were exhausted.

       Two weeks after issuing Hughes, we said in Gulf Coast Inv. Corp. v. Brown that there was

“no reason why the [Hughes] tolling rule . . . should not apply when the attorney’s malpractice

results, not in an appeal on the underlying claim, but in a wrongful foreclosure action by a

third-party [sic] against the client.”36 In that case, a corporation had hired a law firm to conduct a

non-judicial foreclosure sale of real property owned by a third party.37 Two months after the sale,

the property owners sued to invalidate it based on improper notice.38 The wrongful-foreclosure suit

settled within two years,39 and the corporate client sued for legal malpractice several months later.

       35
            Id.
       36
            821 S.W.2d 159, 160 (Tex. 1991).
       37
            Id.
       38
            Id.
       39
            Id.

                                                 12
        The court of appeals dismissed the malpractice suit as time-barred because it was filed more

than two years after the corporation was served in the wrongful-foreclosure lawsuit.40 We reversed.

Relying on Hughes, we held tolling did not cease until final resolution of the wrongful-foreclosure

suit.41 Gulf Coast addressed the “results in litigation” aspect of the Hughes tolling rule and clarified

that Hughes tolling applies when attorney malpractice in the prosecution of a claim (non-judicial

foreclosure in that case) results, not in an appeal of client-initiated litigation, but in third-party

litigation.

        Not long after, we “elaborated on the first policy aspect of the Hughes rule, noting that

attorney-client trust would be eroded if the client had to scrutinize every stage of the case for

possible misstep.”42 But we have nevertheless declined to extend Hughes tolling to professional

liability beyond legal-malpractice claims, even when the same policy concerns were implicated. In

Murphy v. Campbell, which involved tax litigation resulting from accountant malpractice, we held

that the “[discovery] rule should apply whether the [professional] advisor is a lawyer or an

accountant,” but Hughes tolling does not.43 We noted that Hughes tolling was “expressly limited

. . . to attorney malpractice in the prosecution or defense of a claim that results in litigation” and had

been “restricted . . . to the circumstances presented.”44 We further explained that the tolling rule did

        40
             Id.
        41
             Id.
        42
           Apex Towing Co. v. Tolin, 41 S.W.3d 118, 122-23 (Tex. 2001) (discussing Sanchez v. Hastings, 898 S.W.2d
287, 288 (Tex. 1995)).
        43
             964 S.W.2d 265, 271-72 (Tex. 1997).
        44
             Id. at 272.

                                                       13
not apply whenever its underlying policies were implicated, because “[s]uch an exception to

limitations would be far too broad.”45

        We offered our most robust examination of the tolling doctrine several years later in Apex

Towing v. Tolin.46 There, we recognized that the terminal point in the underlying litigation could

be something other than exhaustion of appeals.47 Accordingly, we clarified that when Hughes

tolling applies, “the statute of limitations on a malpractice claim against [an] attorney is tolled until

all appeals on the underlying claim are exhausted or the litigation is otherwise finally concluded.”48

But more importantly, and in counterpoise to Murphy, we also held that the tolling rule applies

categorically even when the rule’s root policy concerns are not implicated.49

        The underlying litigation in Apex Towing terminated when the parties settled the dispute and

the court of appeals dismissed the pending appeal.50 Although the malpractice suit was filed within

two years of that event, the defendant attorneys took the position that Hughes tolling did not apply,

asserting that much of the impetus for adopting the rule was inapplicable because the clients had

hired replacement counsel and the underlying case had settled.51 They argued that “the Hughes

tolling rule should be applied on a case-by-case basis, only when the policy reasons behind the rule

        45
             Id.
        46
             41 S.W.3d 118 (Tex. 2001).
        47
             Id. at 119.
        48
             Id. (emphasis added).
        49
             Id. at 120-22.
        50
             Id. at 119, 122.
        51
             Id. at 120.

                                                   14
also apply directly to the facts of the specific case under review.”52 But we firmly rejected Hughes

tolling as anything other than a “categorical” rule.53

       Whatever uncertainty preceded Apex Towing, it is now settled that Hughes tolling applies

“in each legal-malpractice case matching the Hughes paradigm” “without re-examining whether the

policy reasons behind [it] apply.”54 This is so, “because in the area of limitations, bright-line rules

generally represent the better approach” and help ensure “predictability and consistency” in the

jurisprudence.55 We have thus mandated a “strict application” of the tolling rule limited “to the

category of legal-malpractice cases encompassed within its definition,”56 whether its policy concerns

are implicated or not.

       The dispute here is whether Erikson’s purported blessing of the 2003 and 2005 asset transfers

falls within the category of legal-malpractice claims encompassed in the Hughes tolling rule’s

definition: legal malpractice committed “in the prosecution or defense of a claim that results in

litigation.” For purposes of the summary-judgment motion, Erikson assumes legal malpractice

occurred in connection with the asset transfers and that litigation resulted. The only contested matter

is whether malpractice occurred “in the prosecution or defense of a claim.” Erikson says that

element is conclusively negated because (1) the only claims that were prosecuted or defended were

       52
            Id.
       53
            Id. at 121-22.
       54
            Id. at 122.
       55
            Id.
       56
            Id.

                                                  15
the government and Marine’s claims against one another in the Marine litigation; (2) the

asset-transfer advice might bear some connection with the Marine litigation but it was wholly

unrelated to the actual prosecution or defense of those claims; and (3) Renda was not his client in

the Marine litigation.

       Leaning primarily on the tolling rule’s underlying policies, Renda argues Hughes tolling

applies because (1) defending the Priority Suit and prosecuting the malpractice suit would force him

to take inconsistent positions and (2) the viability of the malpractice suit is inextricably linked with

the outcome of the Priority Suit. He also relies on a broad construction of the tolling rule as

applying to legal malpractice “arising from,” “relating to,” or “connected with” the prosecution or

defense of a claim.

       As we clarified in Apex Towing, we look to the rule, not its motivating policies, to determine

its application. And in doing so, we agree with Erikson that the only claims that were prosecuted

or defended were those in the Marine litigation and the asset transfers were not engaged to prosecute

or defend those claims. We also decline to stretch the rule to encompass the type of tenuous

connection that exists between the malpractice alleged here and the prosecution or defense of a

claim. The weak nexus Renda proposes sweeps far too broadly and would transform a crucial

limitation into little more than a drive-by requirement.

                         B. “In The Prosecution or Defense of A Claim”

       Ordinarily, we do not parse the language in our opinions like the words in a statute. But the

endeavor is useful here because Hughes tolling is a categorical rule, and we chose its enabling

language with care. The rule does not apply every time legal “malpractice . . . results in litigation.”

                                                  16
Rather, we included a critical limitation: the malpractice must be committed “in the prosecution or

defense of a claim.”

         Our Hughes tolling cases confirm that these terms carry their ordinary meaning within the

legal-services context. “Claim” refers to “[t]he assertion of an existing right; any right to payment

or to an equitable remedy, even if contingent or provisional” and “[a] demand for money, property,

or a legal remedy to which one asserts a right . . . .”57 “Prosecution” and “Defense” are opposing

sides of the same coin. To prosecute something means “[t]o commence and carry out (a legal

action).”58 Defense refers to “[a] defendant’s stated reason why the plaintiff . . . has no valid case”59

and to defend a claim means “to do something [protective] . . . [t]o deny, contest, or oppose (an

allegation or claim) . . . [t]o represent (someone) as an attorney; to act as legal counsel for someone

who has been sued or prosecuted.”60

         The legal services forming the basis of Renda’s malpractice claim do not fall within the

Hughes paradigm. Renda may have had a debt claim against Marine, but even assuming Erikson

was simultaneously advising both sides of that loan transaction,61 the mere rendition of legal advice

does not constitute “the prosecution or defense of a claim.”                        If it were sufficient, those

words—which we have repeated in every articulation of the rule—would serve no purpose in

         57
              BLACK’S LAW DICTIONARY at 311 (11th ed. 2019).
         58
              Id. at 1476.
         59
              Id. at 528.
         60
              Id.
        61
           See Stanfield v. Neubaum, 494 S.W.3d 90, 96 (Tex. 2016) (to prevail on a legal-malpractice claim, a plaintiff
must prove, among other things, that the attorney owed the plaintiff a duty of care).

                                                          17
defining the Hughes paradigm. Here, the summary-judgment record establishes that Erikson took

no action to either prosecute the debt claim for Renda or defend it on Marine’s behalf.

       In the Marine litigation, Erikson certainly was prosecuting and defending claims involving

Marine. But, Renda was not a party to the Marine litigation and the alleged malpractice in advising

him either as a corporate officer or a personal creditor of Marine had nothing whatsoever to do with

either prosecuting Marine’s claims against the government or defending the government’s claims

against Marine. The ongoing Marine litigation may have precipitated or even necessitated Marine’s

asset transfers (though the summary-judgment evidence does not demonstrate how), but the asset

transfers neither advanced nor refuted any claims in that case. And the Marine litigation judgment

may have formed the basis for Renda’s liability under the Priority Statute, but the advice Erikson

provided was nonetheless distinct from the Marine litigation itself.

       While our Hughes cases affirm that the alleged malpractice need not occur “in litigation,”

they simultaneously confirm that the alleged malpractice must be directly or integrally connected

to carrying out some kind of legal action. If we have not been entirely scrupulous in our language

describing the relationship between the legal advice and prosecution or defense of a claim, we have

at least been consistent in our application of the rule. In each and every case we have applied

Hughes tolling, the legal services providing the basis for the malpractice claim occurred directly in,

and were integrally connected to, the prosecution or defense of a claim:

                                                 18
         •          drafting of an affidavit of voluntary relinquishment precedent to a termination suit

                    and adoption proceeding;62

         •          allowing the statute of limitations to lapse after being retained to make a claim for

                    asbestos-related personal injuries;63

         •          failing to provide sufficient notice when prosecuting a debt claim through a

                    foreclosure sale;64

         •          trial counsel’s mishandling of an insurance claim forcing a multi-million dollar

                    settlement;65

         •          an attorney’s conflict of interest in a wrongful-death and survival action and

                    concomitant failure to add all tortfeasors to the lawsuit;66

         •          failing to timely file a limitation-of-liability pleading, leaving the client exposed to

                    an excess judgment;67 and

         •          attorney malpractice in a suit to recover on a note against the maker and guarantors.68

         62
Hughes v. Mahaney & Higgins, 821 S.W.2d 154, 155 (Tex. 1991); see also TEX. FAM. CODE
§ 161.001(b)(1)(K) (an affidavit of relinquishment of parental rights executed “before or after” a parental termination
suit is filed is grounds for terminating the parent–child relationship).
         63
              Aduddell v. Parkhill, 821 S.W.2d 158, 158-59 (Tex. 1991).
         64
            Gulf Coast Inv. Corp. v. Brown, 821 S.W.2d 159, 160 (Tex. 1991); see TEX. PROP. CODE § 51.002
(prescribing the mandatory process for selling real property via non-judicial foreclosure sale under a power of sale
conferred by a contract lien).
         65
              Am. Centennial Ins. Co. v. Canal Ins. Co., 843 S.W.2d 480, 418 (Tex. 1992).
         66
              Sanchez v. Hastings, 898 S.W.2d 287, 287-88 (Tex. 1995).
         67
              Apex Towing Co. v. Tolin, 41 S.W.3d 118, 119 (Tex. 2001).
         68
              Underkofler v. Vanasek, 53 S.W.3d 343, 345 (Tex. 2001).

                                                          19
Unlike the legal services at issue in these cases, the legal advice Erikson provided—approving

Marine’s transfer of assets to creditors—was, at best, incidental to and tangentially related to the

ongoing Marine litigation. Litigation can have many ripple effects; Renda’s view of the Hughes

tolling rule would expand its application well beyond what is reasonably justifiable for a judicial

exception to the statute of limitations.

        While some appeals courts have held Hughes does not apply to “transactional work” even

when litigation ultimately ensues from the underlying legal services,69 we view the “transactional

work” exclusion as merely a shorthand way of saying Hughes tolling is limited to malpractice “in

the prosecution or defense of a claim” whether occurring during litigation or not. Legal work only

incidentally related to activities undertaken to prosecute or defend a claim is not encompassed within

the Hughes paradigm. Such is the case here. Accordingly, Hughes tolling does not apply, and

Renda’s malpractice lawsuit was untimely.

        69
           See, e.g., JC Project Mgmt. Servs. v. Kitchens, No. 12-17-00130-CV, 2018 WL 3203437, at *3 (Tex.
App.—Tyler June 29, 2018, pet. denied) (mem. op.); CellTex Site Servs. v. Kreager Law Firm, No. 04-12-00249-CV,
2012 WL 6720663, at *4 (Tex. App.—San Antonio Dec. 28, 2012, pet. denied) (mem. op.); Isaacs v. Schleier, 356
S.W.3d 548, 562 (Tex. App.—Texarkana 2011, pet. denied); Brennan v. Manning, No. 07-06-0041-CV, 2007 WL
1098476, at *2 (Tex. App.—Amarillo Apr.12, 2007, pet. denied) (mem. op.); Murphy v. Mullin, Hoard & Brown, L.L.P.,
168 S.W.3d 288, 292-93 (Tex. App.—Dallas 2005, no pet.); Vacek Grp. v. Clark, 95 S.W.3d 439, 444-47 (Tex.
App.—Houston [1st Dist.] 2002, no pet.); Burnap v. Linnartz, 914 S.W.2d 142, 147-48 (Tex. App.—San Antonio 1995,
writ denied).

                                                       20
                    C. As Defined, Hughes Tolling Reflects a Balanced Approach

        As a judicial exception to the statute of limitations, the Hughes tolling rule reflects a minority

approach,70 but we have determined that in its present form, the rule “appropriately balance[s] the

competing concerns of the need to bar stale claims and avoid prejudice to defendants” while

“preserving a reasonable opportunity for plaintiffs to pursue legitimate claims.”71 No compelling

reason exists to extend it here and doing so would unfairly prejudice defendants. The broad

construction and application of the rule Renda advocates would permit tolling of unlimited reach

and duration without any requirement or assurance of notice to the attorney. This would upset the

balance we intended and undermine the policy of repose underlying the statute of limitations.

        Statutes of limitations are “not directed to the merits of any individual case, they are a result

of legislative assessment of the merits of cases in general.”72 They “protect the courts and the public

from the perils of adjudicating stale claims” and “afford comfort and repose to the defendant.”73

“Limitations statutes afford plaintiffs what the legislature deems a reasonable time to present their

claims and protect defendants and the courts from having to deal with cases in which the search for

        70
           See Apex Towing, 41 S.W.3d at 122 (“[T]he tolling rule we adopted is not universally followed.”); Hughes
v. Mahaney & Higgins, 821 S.W.2d 154, 157-58 n.5 (Tex. 1991) (comparing to approaches followed by other states);
see also Legal, accountant, and miscellaneous negligence or malpractice, 1A American Law of Torts § 5:37, nn.26-27
(compiling cases); Wendy Cox Dvorak, Idaho’s Statute of Limitations and Accrual of Legal Malpractice Causes of
Action: Sorry, but Your Case Was over Before It Began, 31 Idaho L. Rev. 231, 258 & n.219 (1994) (listing Hughes as
a minority position).
        71
             Apex Towing, 41 S.W.3d at 122.
        72
             Robinson v. Weaver, 550 S.W.2d 18, 20 (Tex. 1977).
        73
             Godoy v. Wells Fargo Bank, N.A., 575 S.W.3d 531, 538 (Tex. 2019).

                                                        21
truth may be seriously impaired by the loss of evidence, whether by death or disappearance of

witnesses, fading memories, disappearance of documents or otherwise.”74

         Determining when a cause of action accrues is a judicial function.75 But to respect the

legislative prerogative, judicial exceptions to limitations statutes cannot be undertaken lightly:

         The fact that a meritorious claim might thereby be rendered nonassertable is an
         unfortunate, occasional by-product of the operation of limitations. All statutes of
         limitations provide some time period during which the cause of action is assertable.
         However, preclusion of a legal remedy alone is not enough to justify a judicial
         exception to the statute. The primary purpose of limitations, to prevent litigation of
         stale or fraudulent claims, must be kept in mind.76

         Limitations can yield harsh consequences in some circumstances,77 but this is not one of

those cases. Eleven years passed between the conversations Erikson had with Renda’s accountant

and the filing of the malpractice lawsuit. Renda had the protection and benefit of the discovery rule

for more than half that time, but waited an additional five years to charge Erikson with responsibility

for the Priority Suit. Even without equitable tolling, malpractice litigants in Renda’s position have

options to ensure their claims are not eliminated by the passage of time. Tolling agreements provide

advantages that make them attractive to both client and counsel, and as we have recognized in the

accounting-malpractice context, abatement is also an adequate safeguard.78 Neither option is

         74
              Murray v. San Jacinto Agency, Inc., 800 S.W.2d 826, 828 (Tex. 1990).
         75
              Willis v. Maverick, 760 S.W.2d 642, 644 (Tex. 1988).
         76
              Robinson, 550 S.W.2d at 20.
         77
              Brown v. Shwarts, 968 S.W.2d 331, 334 (Tex. 1998).
         78
            Murphy v. Campbell, 964 S.W.2d 265, 273 (Tex. 1997) (maintaining competing tax and malpractice suits
“would have required plaintiffs to take inconsistent positions,” but that conflict could be avoided “by requesting the court
to abate the malpractice case pending resolution of the tax suit”).

                                                            22
guaranteed but both have the benefit of ensuring an attorney has timely notice of a legal-malpractice

claim, so evidence may be preserved and the attorney afforded a fair opportunity to mount a defense.

Extending Hughes tolling beyond its defined boundaries is thus unnecessary.

                                          III. Conclusion

       Renda’s malpractice claim undisputedly accrued more than two years before he sued

Erikson. Because the legal advice Erikson provided regarding settlement of Marine’s debts was only

tangentially related to the prosecution or defense of a claim, it does not meet the criteria for

Hughes tolling. We therefore reverse the court of appeals’ judgment and render judgment that

Renda take nothing on his malpractice claims.

                                                      ____________________________________
                                                      Eva M. Guzman
                                                      Justice

OPINION DELIVERED: December 20, 2019

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