Court Opinion

ID: 3113228
Source: CourtListenerOpinion
Date Created: 2015-10-16 07:13:57.842509+00
Date Added: 2024-06-11T11:52:13.969926
License: Public Domain

COURT OF APPEALS
                         SECOND DISTRICT OF TEXAS
                              FORT WORTH

                             NO. 02-12-00048-CV

IN RE TEXAS COLLEGIATE                                              RELATORS
BASEBALL LEAGUE, LTD. AND
GERALD W. HADDOCK

                                    ----------

                           ORIGINAL PROCEEDING

                                    ----------

                                   OPINION
                                    ----------

                                I. Introduction

      Relators Texas Collegiate Baseball League, Ltd. (TCBL) and Gerald W.

Haddock seek mandamus relief from the trial court‘s January 11, 2012 order

denying their amended motion to abate portions of this case between Relators

and Real Parties In Interest Jeffrey J. Wolf and The Wolf Law Firm, P.C.

(collectively, Wolf). We conditionally grant TCBL and Haddock‘s petition for writ

of mandamus.
                                II. Background1

      Four separate lawsuits are tangentially involved in this mandamus

proceeding, and all four remain pending.         Wolf, an attorney, represented

Haddock in two of the lawsuits (collectively, the Crescent litigation). 2 Wolf also

represented TCBL in the third lawsuit (the Baseball litigation).     Although the

parties agree that the Crescent and Baseball litigations remain pending, the

parties have not provided any additional information about the status of those

cases.

      This, the fourth, lawsuit began when TCBL filed suit against Wolf to

enforce an alleged settlement agreement. According to TCBL and Haddock, the

parties entered into a settlement agreement in May 2010 to resolve disputes

concerning legal fees Wolf claimed he was owed by TCBL and Haddock relating

to Wolf‘s representation of them in the Crescent and Baseball litigations. Wolf

disputes that the parties entered into an enforceable agreement, and he

responded to TCBL‘s original petition by filing a counterclaim against TCBL and a

third-party petition against Haddock for recovery of his attorney‘s fees

(collectively, the fee claim). TCBL and Haddock responded to the counterclaim

      1
      Other than judicial orders and opinions, many of the documents in this
case are sealed. See Tex. R. Civ. P. 76a. Our recitation of the relevant
background is therefore limited to a general description of the factual and
procedural posture of this case.
      2
       The two lawsuits involved in the Crescent litigation have been
consolidated in the 67th District Court of Tarrant County, Texas.

                                        2
by asking that the trial court abate the lawsuit so that TCBL could investigate

possible malpractice claims against Wolf. The trial court denied the motion, and

TCBL and Haddock later amended their pleadings to allege malpractice against

Wolf relating to his representation of them in the Crescent and Baseball

litigations (collectively, the malpractice claims).

      In June 2011, TCBL and Haddock filed a motion for summary judgment to

enforce the purported settlement agreement, but the trial court, Respondent

Judge Wade Birdwell, denied the motion. In July 2011, TCBL and Haddock filed

another motion to abate the fee claim and malpractice claims pending final

resolution of the Crescent and Baseball litigations.       The trial court held an

evidentiary hearing and denied the motion by written order dated January 11,

2012. TCBL and Haddock then sought mandamus relief in this court.

                              III. Standard of Review

      Mandamus relief is proper only to correct a clear abuse of discretion when

there is no adequate remedy by appeal. In re Columbia Med. Ctr. of Las Colinas,

290 S.W.3d 204, 207 (Tex. 2009) (orig. proceeding).

      A trial court clearly abuses its discretion when it reaches a decision so

arbitrary and unreasonable as to amount to a clear and prejudicial error of law or

if it clearly fails to correctly analyze or apply the law. In re Olshan Found. Repair

Co., 328 S.W.3d 883, 888 (Tex. 2010) (orig. proceeding); Walker v. Packer, 827
S.W.2d 833, 839 (Tex. 1992) (orig. proceeding). With respect to the resolution of

factual issues or matters committed to the trial court=s discretion, we may not

                                           3
substitute our judgment for that of the trial court unless the relator establishes

that the trial court could reasonably have reached only one decision and that the

trial court=s decision is arbitrary and unreasonable. In re Sanders, 153 S.W.3d
54, 56 (Tex. 2004) (orig. proceeding); Walker, 827 S.W.2d at 839–40. In other

words, we give deference to a trial court=s factual determinations that are

supported by evidence, but we review the trial court=s legal determinations de

novo. In re Labatt Food Serv., L.P., 279 S.W.3d 640, 643 (Tex. 2009) (orig.

proceeding).   A trial court abuses its discretion if it fails to analyze the law

correctly or misapplies the law to established facts. Iliff v. Iliff, 339 S.W.3d 74, 78

(Tex. 2011); State v. Sw. Bell Tel. Co., 526 S.W.2d 526, 528 (Tex. 1975). Also, a

trial court‘s erroneous legal conclusion, even in an unsettled area of law, is an

abuse of discretion. In re United Scaffolding, Inc., 301 S.W.3d 661, 663 (Tex.

2010).

                             IV. Abuse of Discretion

      TCBL and Haddock contend in their sole issue that the trial court abused

its discretion by denying their motion to abate the fee claim and malpractice

claims until the Crescent and Baseball litigations and any related appeals are

concluded. Wolf responds that the trial court properly exercised its discretion by

denying abatement because severance or separate trials would instead be

appropriate.

                                          4
A. The Parties’ Contentions

      To support their abatement argument, TCBL and Haddock rely in part on

the rule that the statute of limitations for legal malpractice claims involving prior

or ongoing litigation ―is tolled until all appeals on the underlying claim are

exhausted or the litigation is otherwise finally concluded.‖ Apex Towing Co. v.

Tolin, 41 S.W.3d 118, 119 (Tex. 2001). TCBL and Haddock acknowledge that

the statute of limitations is not at issue in this mandamus proceeding, but they

argue that the policy considerations justifying the tolling rule apply equally in this

case and require abatement. Those policy considerations are two-fold. First,

tolling the statute of limitations avoids ―forc[ing] a client into the untenable

position of having to adopt inherently inconsistent litigation postures in the

underlying case and the malpractice case.‖ Id. at 121 (discussing Hughes v.

Mahaney & Higgins, 821 S.W.2d 154, 156–57 (Tex. 1991)).                Second, ―the

viability of [the malpractice] action depends on the outcome of the underlying

litigation.‖ Id. TCBL and Haddock argue that abatement of the fee claim and

malpractice claims is required because they will otherwise be forced to take

inherently inconsistent litigation postures by defending Wolf‘s alleged malpractice

in the Crescent and Baseball litigations in an effort to prevail in those cases while

at the same time affirmatively asserting malpractice claims and defenses against

Wolf in this case. TCBL and Haddock also assert that, if the malpractice and fee

claims are not abated, they will be required to engage in discovery and pursue

                                          5
claims that have not yet accrued and for which their alleged damages are not yet

known.

      Wolf does not dispute that the malpractice claims are premature or that the

trial court could have chosen to abate the malpractice claims.       Wolf does,

however, dispute the propriety of abating the fee claim and contends that

severance or separate trials of the fee claim and malpractice claims would

resolve the potential problems raised by TCBL and Haddock.3

      Neither TCBL and Haddock nor Wolf cite any controlling precedent to

support their competing contentions.    For example, the statute of limitations

cases discussed above do not directly apply because the statute of limitations is

not at issue in this case. Furthermore, TCBL and Haddock cite three cases for

the proposition that abatement is the established remedy when a lawsuit is filed

prematurely. See In re Foremost Cnty. Mut. Ins. Co., 172 S.W.3d 128, 135 (Tex.

App.—Beaumont 2005, orig. proceeding); Philips v. Giles, 620 S.W.2d 750, 751

(Tex. Civ. App.—Dallas 1981, orig. proceeding); Marine Prod. Co. v. Shell Oil

Co., 146 S.W.2d 1024, 1025 (Tex. Civ. App.—Austin 1941, no writ). While those

      3
        The parties also dispute whether the malpractice claims are compulsory
counterclaims in this case, but we do not decide that issue because, as
explained below, Wolf‘s alleged malpractice will be an issue during the trial of
both the fee claim and the malpractice claims since attorney malpractice is both
an affirmative claim and a defense to a suit for recovery of attorney‘s fees. See
Tex. R. App. P. 47.1; see also Barcelo v. Elliott, 923 S.W.2d 575, 579 (Tex.
1996); Judwin Props., Inc. v. Griggs & Harrison, P.C., 911 S.W.2d 498, 507 (Tex.
App.—Houston [1st Dist.] 1995, no writ.).

                                       6
cases address the necessity of abating the malpractice claims, they do not

address whether the fee claim must also be abated.4

      Wolf‘s supporting authority is similarly inapplicable.     See Van Dyke v.

Boswell, O’Toole, Davis & Pickering, 697 S.W.2d 381, 384 (Tex. 1985); Richter

v. Mery, No. 04-10-00098-CV, 2010 WL 3782186, at *1 (Tex. App.—San Antonio

Sept. 29, 2010, pet. denied) (mem. op.). Wolf cites Van Dyke for the proposition

that a malpractice claim is not barred by res judicata when the trial court orders

separate trials of a fee claim and a malpractice claim that were originally

asserted as counterclaims. See 697 S.W.2d at 384. But whether res judicata

would or would not bar a subsequent malpractice suit by TCBL and Haddock

does not help resolve whether TCBL and Haddock will potentially be prejudiced

by having to defend the fee claim while the Crescent and Baseball litigations

remain pending and while their malpractice defenses to the fee claim are not

mature. Wolf cites Richter because the appellate opinion reflects that the trial

court in the case stated that ―it would be ‗cleaner‘ if a motion to sever were filed‖

to separate Mery‘s claim for attorney‘s fees from the underlying lawsuit, but there

      4
       TCBL and Haddock also cite a 1980 opinion from a New York trial court
that reaches the result that TCBL seeks in this case, but the case is
distinguishable because it involved a contingent-fee claim rather than an hourly-
fee claim by the attorney. See Pudalov v. Brogan, 427 N.Y.S.2d 345, 349 (N.Y.
Sup. Ct. 1980). As an aged trial court case from another jurisdiction that was not
reviewed by an appellate court, the case also has little persuasive value.

                                         7
is no analysis or further discussion in the opinion concerning the propriety of

severance, separate trials, or abatement. See 2010 WL 3782186, at *1–3.5

B. Severance or Separate Trials vs. Abatement

      The parties do not dispute that the malpractice claims are not yet mature

and should be abated pending the outcome of the Crescent and Baseball

litigations. We must therefore decide whether the fee claims may proceed or

whether they must be abated along with the malpractice claims. In that regard,

the necessity of abatement is illustrated by explaining why severance or separate

trials is not appropriate and by applying the policy considerations that support the

statute of limitations tolling rule discussed above.

      Rule 41 of the Texas Rules of Civil Procedure provides that ―[a]ny claim

against a party may be severed and proceeded with separately.‖ Tex. R. Civ. P.

41. However, a claim is properly severable only if (1) the controversy involves

more than one cause of action, (2) the severed claim is one that would be the

proper subject of a lawsuit if independently asserted, and (3) the severed claim is

not so interwoven with the remaining action that they involve the same facts and

      5
       Wolf also cites cases from other jurisdictions, but they are similarly
distinguishable. Abatement of the attorney fee claim was not at issue in the
appeal decided by the Nevada Supreme Court, and although the other cases
address the abatement or dismissal of prematurely filed legal malpractice claims,
neither case involved a competing claim for attorney‘s fees or addressed whether
such a claim must also be abated. See Semenza v. Nev. Med. Liability Ins. Co.,
765 P.2d 184, 186 (Nev. 1988); Burgess v. Lippman, 929 So. 2d 1097, 1098–99
(Fla. Ct. App. 2006); Doe v. Golden & Walters, PLLC, 173 S.W.3d 260, 270,
275–76 (Ky. Ct. App. 2005).

                                          8
issues. Guaranty Fed. Sav. Bank v. Horseshoe Operating Co., 793 S.W.2d 652,

658 (Tex. 1990).         ―[A]voiding prejudice, doing justice, and increasing

convenience are the controlling reasons to allow a severance.‖ F.F.P. Operating

Partners, L.P. v. Duenez, 237 S.W.3d 680, 693 (Tex. 2007) (citing Guar. Fed.

Sav. Bank, 793 S.W.2d at 658).        Rule of civil procedure 174(b) governs the

granting of separate trials, and its purpose is similarly ―to further convenience, to

avoid prejudice, and to promote the ends of justice.‖        In re Ethyl Corp., 975
S.W.2d 606, 609–10 (Tex. 1998) (orig. proceeding); see Tex. R. Civ. P. 174(b).

      Wolf‘s alleged malpractice, whether it be negligence or breach of fiduciary

duty, will be central to both TCBL‘s and Haddock‘s affirmative malpractice claims

and their defenses to Wolf‘s fee claim. See Barcelo, 923 S.W.2d at 579 (―[A]

legal malpractice action sounds in tort and is governed by negligence

principles.‖); NationsBank of Tex., N.A. v. Akin, Gump, Hauer & Feld, L.L.P., 979
S.W.2d 385, 397–98 (Tex. App.—Corpus Christi 1998, pet. denied) (holding that

because malpractice claim must be remanded, law firm‘s claim for recovery of

fees must also be remanded because law firm‘s entitlement to fees was ―wholly

dependent‖ on the outcome of malpractice claims); see also Burrow v. Arce, 997
S.W.2d 229, 240 (Tex. 1999) (holding client need not prove actual damage

before obtaining forfeiture of attorney‘s fees for breach of attorney‘s fiduciary duty

to client); Judwin Props., Inc., 911 S.W.2d at 507 (―Recovery of fees paid to an

attorney may be appropriate when [the attorney‘s] negligence rendered the

services of no value.‖); Morales v. Cline, 202 S.W. 754, 757 (Tex. Civ. App.—

                                          9
San Antonio 1918, writ dism‘d w.o.j.) (noting that attorney‘s negligence may

preclude recovery of compensation for attorney‘s services).        Severance or

separate trials are therefore not appropriate because the fee claim and the

malpractice claims involve the same facts and issues.

      Additionally, severance or separate trials would not avoid prejudice, do

justice, or increase convenience. The parties agree that the malpractice claims

are not mature.   If Wolf is allowed to proceed on the fee claim, TCBL and

Haddock would be forced to trial on the fee claim with unripe defenses.

Assuming the malpractice claims eventually mature, the parties would then have

another trial concerning Wolf‘s alleged malpractice. Thus, severing or ordering

separate trials of the fee claim and the malpractice claims would require the

parties to have essentially the same trial twice, except that TCBL and Haddock

would have to defend the fee claim at the first trial with unripe defenses. See In

re State, 355 S.W.3d 611, 614 (Tex. 2011) (orig. proceeding) (holding severance

order improper because it would require eight separate trials with duplicative

evidence that could be presented in one trial).     Severance or separate trials

might actually increase the possibility of prejudice and cause a burden to the

court system and the parties.

      Also instructive in considering the ineffectiveness of severance or separate

trials are the policy considerations that support the tolling of the statute of

limitations for legal malpractice claims. Requiring TCBL and Haddock to respond

to discovery and present evidence at trial concerning Wolf‘s alleged malpractice

                                       10
while the Crescent and Baseball litigations remain pending will likely require

TCBL and Haddock to simultaneously take inconsistent litigation positions. For

example, TCBL and Haddock must necessarily defend Wolf‘s actions in the

Crescent and Baseball litigations while those cases remain pending in an effort to

prevail in those cases. But if Wolf‘s fee claim is not abated until those litigations

are concluded, TCBL and Haddock must simultaneously respond to discovery

and prepare for trial on issues for which they will necessarily contend that Wolf

acted improperly while serving as their counsel. See generally Apex Towing Co.,
41 S.W.3d at 121 (recognizing possibility that client may be forced ―to adopt

inherently inconsistent litigation postures in the underlying case and the

malpractice case‖). Also, the malpractice allegations and damage theories will

remain fluid until the Crescent and Baseball litigations conclude. See generally

id. (noting that viability of malpractice action ―depends on the outcome of the

underlying litigation‖). Wolf argues that the trial court‘s confidentiality order would

adequately protect TCBL and Haddock from inconsistent litigation positions

because the other parties to the Crescent and Baseball litigations would not be

privy to TCBL‘s and Haddock‘s litigation positions in this case, but the

confidentiality order will not protect TCBL and Haddock from having to provide

Wolf with evolving or even inconsistent information through discovery as the

Crescent and Baseball litigations proceed toward conclusion.

      It makes little sense for the parties to conduct discovery and prepare for

trial concerning the fee claim and the malpractice claims in this litigation while the

                                          11
Crescent and Baseball litigations remain pending.               Indeed, TCBL‘s and

Haddock‘s malpractice claims may have no merit upon final resolution of the

Crescent and Baseball litigations, leading to a much simpler resolution of the fee

claim. Although Wolf might be prejudiced by having to wait until the resolution of

the Crescent and Baseball litigations to try to recover his fees (and more so if

TCBL‘s and Haddock‘s malpractice claims later have no merit), the risk of

prejudice to Wolf is far less than the risk of prejudice and burden to the parties

and the judicial system if TCBL and Haddock are required to try the fee claim

before their defenses mature. See In re Van Waters & Rogers, Inc., 145 S.W.3d
203, 211 (Tex. 2004) (orig. proceeding) (holding that whatever advantage might

be gained by improper consolidation was ―overwhelmed by the greater danger an

unfair trial would pose to the integrity of the judicial process‖).

      The trial court‘s order denying TCBL and Haddock‘s amended motion to

abate does not specify the basis of its decision to deny the motion. However,

considering the sealed appellate record, the parties‘ arguments, and the options

arguably available to the trial court short of abating the fee claim and malpractice

claims pending the outcome of the Crescent and Baseball litigations, the trial

court had no viable option other than to grant the motion. We therefore hold that

the trial court abused its discretion by denying TCBL and Haddock‘s motion to

abate the portions of this case relating to the fee claim and malpractice claims

pending the outcome of the Crescent and Baseball litigations. See Liberty Nat’l

Fire Ins. Co. v. Akin, 927 S.W.2d 627, 630 (Tex. 1996) (―To satisfy the clear

                                           12
abuse of discretion standard, the relator must show ‗that the trial court could

reasonably have reached only one decision.‘‖) (quoting Walker, 827 S.W.2d at

840).

                         V. Adequate Appellate Remedy

        Having determined that the trial court abused its discretion, we must also

determine whether TCBL and Haddock have an adequate remedy by appeal that

would preclude mandamus relief.

        Absent extraordinary circumstances, mandamus will not issue unless

TCBL and Haddock lack an adequate remedy by appeal. Van Waters & Rogers,

Inc., 145 S.W.3d at 210–11 (citing Walker, 827 S.W.2d at 839). This requirement

―has no comprehensive definition.‖ In re Ford Motor Co., 165 S.W.3d 315, 317

(Tex. 2005) (orig. proceeding).    Whether a clear abuse of discretion can be

adequately remedied by appeal depends on a careful analysis of costs and

benefits of interlocutory review. In re McAllen Med. Ctr., Inc., 275 S.W.3d 458,

464 (Tex. 2008) (orig. proceeding).       As this balance depends heavily on

circumstances, it must be guided by analysis of principles rather than simple

rules that treat cases as categories. Id. An appellate remedy is adequate when

any benefits to mandamus review are outweighed by the detriments.            In re

Prudential Ins. Co. of Am., 148 S.W.3d 124, 136 (Tex. 2004) (orig. proceeding).

When the benefits outweigh the detriments, we must conduct further analysis.

Id. An appeal is inadequate for mandamus purposes when parties are in danger

of permanently losing substantial rights, such as when the appellate court would

                                        13
not be able to cure the error, the party‘s ability to present a viable claim or

defense is vitiated, or the error cannot be made part of the appellate record. Van

Waters & Rogers, Inc., 145 S.W.3d at 210–11; Walker, 827 S.W.2d at 843–44.

An appellate court should also consider whether mandamus will allow the court

―to give needed and helpful direction to the law that would otherwise prove

elusive in appeals from final judgments‖ and ―whether mandamus will spare

litigants and the public ‗the time and money utterly wasted enduring eventual

reversal of improperly conducted proceedings.‘‖ In re Team Rocket, L.P., 256
S.W.3d 257, 262 (Tex. 2008) (orig. proceeding) (quoting Prudential, 148 S.W.3d

at 136).

      Continuing with the fee claim while the Crescent and Baseball litigations

remain pending will likely require TCBL and Haddock to simultaneously

prosecute and defend suits with inconsistent and evolving legal theories. See

generally Apex Towing Co., 41 S.W.3d at 121. Moreover, TCBL and Haddock

will assert malpractice against Wolf both as a defense to the fee claim and as an

affirmative cause of action. Thus, the parties will essentially have the same trial

twice if the fee claim is not abated, except that TCBL and Haddock will defend

the fee claim at the first trial with unripe defenses. See State, 355 S.W.3d at

614–15 (holding appellate remedy inadequate due to ―enormous waste of judicial

and public resources that compliance with the trial court‘s [severance] order

would entail‖); Waters & Rogers, Inc., 145 S.W.3d at 210–11 (stating that parties

are in danger of losing substantial rights when, among other things, their ability to

                                         14
present a viable claim or defense is vitiated). Because TCBL and Haddock will

likely be prejudiced by having to defend the fee claim before their malpractice

claims mature, because TCBL‘s and Haddock‘s malpractice claims will not

mature until the Crescent and Baseball litigations are finally concluded, and

because a trial on the fee claim alone would be an unreasonable waste of

resources for both the judicial system and the parties, we hold that TCBL and

Haddock do not have an adequate remedy by appeal. We therefore sustain their

sole issue.

                                  VI. Conclusion

       Having sustained TCBL and Haddock‘s sole issue, we conditionally grant a

writ of mandamus directing the trial court to vacate its order denying TCBL and

Haddock‘s amended motion to abate and directing the trial court to grant TCBL

and Haddock‘s amended motion to abate so that the fee claim and malpractice

claims (as defined in this opinion) are abated until the Crescent and Baseball

litigations and any resulting appeals are finally concluded. We are confident that

the trial court will comply within the next thirty days. A writ will issue only if the

trial court fails to do so.

                                                    ANNE GARDNER
                                                    JUSTICE

PANEL: GARDNER, WALKER, and MEIER, JJ.

DELIVERED: April 5, 2012

                                         15