Court Opinion

ID: 3102079
Source: CourtListenerOpinion
Date Created: 2015-10-16 05:19:23.982448+00
Date Added: 2024-06-11T11:24:44.102625
License: Public Domain

NO. 07-10-00327-CV

                              IN THE COURT OF APPEALS

                       FOR THE SEVENTH DISTRICT OF TEXAS

                                      AT AMARILLO

                                         PANEL A

                                  FEBRUARY 16, 2012

                            BURNWOOD, INC., APPELLANT

                                             v.

               CRAIG, TERRILL HALE & GRANTHAM, L.L.P., H. GRADY
                 TERRILL AND ANDREW B. CURTIS, APPELLEES

            FROM THE 72ND DISTRICT COURT OF LUBBOCK COUNTY;

            NO. 2008-543,077-A; HONORABLE DAVID GLEASON, JUDGE

Before CAMPBELL and HANCOCK and PIRTLE, JJ.

                               MEMORANDUM OPINION

       Burnwood, Inc. appeals a take-nothing summary judgment rendered by the trial

court on claims asserted against appellees Craig, Terrill, Hale & Grantham, L.L.P. and

H. Grady Terrill and Andrew B. Curtis (collectively, CTHG) for professional negligence

and breach of fiduciary duty. We will affirm the judgment of the trial court.
                                      Background

      In 2001, Rusty Cagle1 leased from Burnwood a commercial space at 2419

Broadway in Lubbock, as the location of a restaurant called Flatlander‟s. At the time,

Charley Ray owned Burnwood. Cagle‟s relationship with Ray was uneventful until July

2005 when Ray died and ownership of Burnwood passed to Ray‟s daughter Ravan

Watson.

      Greg Thornton was a close friend of Ray and helped him with the operation of

Burnwood. In 2003, Thornton retained CTHG partner Hugh Lyle for representation in

connection with two of Burnwood‟s real estate leases with other lessees, Outlaw Sports

and Cold Stone Creamery Leasing Company. The record contains a copy of the Cold

Stone lease, which Lyle helped negotiate, showing Burnwood as the landlord. A draft of

the lease shows changes to its paragraph requiring that the tenant maintain certain

insurance. The record also contains a letter to Outlaw, assertedly drafted or revised by

Lyle. Among the issues addressed in that letter is Outlaw‟s failure to obtain the required

insurance.

      In January 2006, Cagle notified Watson he was renewing the lease.

Nonetheless Watson sent Cagle a notice of termination letter, changed the locks on the

building, and subsequently leased the premises to another party.

      Seeking advice concerning his remedies against Watson, Cagle retained CTHG.

The summary judgment evidence CTHG filed explains that the firm‟s conflicts check did

      1
         In subsequent litigation, Cagle was styled, “Rusty Cagle d/b/a Red Bottoms
a/k/a Flatlander‟s.”
                                            2
not reveal Lyle‟s 2003 work because the file was listed only under Thornton‟s name. In

February 2006, CTHG filed suit on behalf of Cagle against Burnwood and Watson.

Cagle sought damages arising from the breach of the Burnwood lease agreement and

tortious interference with a business relationship. Burnwood defended on the claim that

Cagle breached the lease first by failing to maintain insurance on the property as

required by the lease. Cagle countered that Burnwood waived the insurance

requirement.

       Cagle supported his claim that Ray waived the insurance requirement with a

November 2006 affidavit by Greg Thornton, who averred the condition of the

restaurant‟s roof made obtaining insurance without substantial repairs, “impossible.”

Thus, he added, Ray and Cagle agreed that Ray was not required to repair the roof and

Cagle was not required to obtain insurance coverage. During trial of the case, Thornton

testified for Cagle stating that Cagle maintained acceptable liability insurance coverage.

Thornton also stated that Ray did not maintain insurance on the building and that Ray

had difficulty obtaining insurance because of the condition of the roof.

       The trial resulted in a money judgment for Cagle signed in September 2007.

Burnwood appealed, contending the jury should have found that Cagle breached the

lease first by failing to maintain insurance coverage on the property. We affirmed the

judgment. Burnwood, Inc. v. Cagle, No. 07-07-0492-CV, 2009 Tex. App. Lexis 4066

(Tex.App.--Amarillo June 8, 2009, pet. denied) (mem. op.).

       Meanwhile, in April 2008, Cagle, represented by CTHG, filed another suit against

Burnwood, Watson, and others. Among other things, the suit alleged the defendants

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fraudulently transferred assets with the intent to “hinder, delay, or defraud” Cagle in his

effort to enforce the September 2007 judgment.

       Attorney Kevin B. Miller filed an answer for Burnwood, Watson and the other

defendants. Some four days later, Cagle moved to disqualify Miller on the ground that

as a director of one of the defendant entities he was a witness whose testimony would

be “substantially adverse to his client‟s interests.” Two days later Burnwood filed an

“advisory of conflict of interest” asserting CTHG previously represented Burnwood.2

       Burnwood then filed a third-party action against CTHG seeking damages for

professional negligence and breach of fiduciary duty. The suit is based on contentions

Burnwood was the actual client for whom Lyle performed his 2003 work despite the

firm‟s file designating Thornton as the client, giving rise to a conflict of interest when the

firm undertook to represent Cagle against Burnwood. Burnwood‟s pleadings alleged

CTHG breached its fiduciary duties to Burnwood when it “failed to disclose the prior

representation” of Burnwood, then recovered a judgment for Cagle against its former

client. Burnwood plead also that CTHG made use of confidential information obtained

through its prior representation.

       With regard to the injury it suffered from CTHG‟s actions, Burnwood pointed to

the judgment obtained by Cagle. As we understand the particulars of its theory, had

Burnwood known during its litigation with Cagle over the lease that Thornton, with Lyle‟s

advice, had enforced the requirement of tenant insurance in the Outlaw Sports and Cold

       2
         The summary judgment record contains Burnwood‟s explanation that Watson
did not become aware of Lyle‟s work for Thornton until Cagle‟s 2007 judgment against
Burnwood was on appeal.
                                              4
Stone Creamery leases, it would have impeached Thornton‟s testimony favoring

Cagle‟s waiver theory and urged the evidence in defense of the waiver claim. And

ostensibly the outcome of the 2006-07 litigation would have been different because the

jury would have disbelieved Cagle and found he breached the lease first by failing to

maintain insurance according to the terms of the lease.

      CTHG filed traditional and no-evidence motions for summary judgment. The no-

evidence grounds asserted Burnwood had no evidence to support the proximate cause

and damage elements of its causes of action. Without stating the ground, the trial court

rendered summary judgment in favor of CTHG and severed Burnwood‟s third-party

action from the remainder of Cagle‟s suit. This appeal followed.

                                        Analysis

      Through two issues Burnwood asserts the record presents sufficient evidence to

preclude summary judgment on the traditional and no-evidence motions for summary

judgment of CTHG. When summary judgment is sought on multiple grounds and the

trial court‟s order does not indicate the basis for its ruling, the summary judgment is

affirmed on appeal if any theory advanced by the movant is meritorious.         Carr v.

Brasher, 776 S.W.2d 567, 569 (Tex. 1989). Accordingly, we will discuss only CTHG‟s

no-evidence motion and whether Burnwood presented more than a scintilla of evidence

of causation.

      We review summary judgments de novo. Valence Operating Co. v. Dorsett, 164
S.W.3d 656, 661 (Tex. 2005). In so doing, we examine the entire summary judgment

record in the light most favorable to the nonmovant, indulging every reasonable
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inference and resolving any doubts against the motion.       Yancy v. United Surgical

Partners Int’l, Inc., 236 S.W.3d 778, 782 (Tex. 2007); City of Keller v. Wilson, 168
S.W.3d 802, 824-25 (Tex. 2005).

      When a movant files a no-evidence motion in proper form under Rule of Civil

Procedure 166a(i), the burden shifts to the nonmovant to defeat the motion by

presenting evidence that raises an issue of material fact regarding the elements

challenged by the motion. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex.

2006); Weaver v. Highlands Ins. Co., 4 S.W.3d 826, 829 (Tex.App.--Houston [1st Dist.]

1999, no pet.). In other words, the nonmovant must respond to a no-evidence motion

by presenting more than a scintilla of probative evidence on each challenged element.

King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003); DR Partners v. Floyd,

228 S.W.3d 493, 497 (Tex.App.--Texarkana 2007, pet. denied). More than a scintilla of

evidence exists when the evidence “rises to a level that would enable reasonable and

fair-minded people to differ in their conclusions.” Merrell Dow Pharmaceuticals, Inc. v.

Havner, 953 S.W.2d 706, 711 (Tex. 1997).

      Here, then, in response to the no-evidence motion, Burnwood was required to

present the trial court with evidence raising a genuine issue of material fact on the

challenged element of causation, specifically, evidence that the alleged wrongful

conduct by CTHG was a proximate cause of damage to Burnwood. See Akin, Gump,

Strauss, Hauer & Feld, L.L.P. v. Nat’l Dev. & Research Corp., 299 S.W.3d 106, 112

(Tex. 2009) (“To prevail on a legal malpractice claim, the plaintiff must prove the

defendant owed the plaintiff a duty, the defendant breached that duty, the breach

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proximately caused the plaintiff's injury, and the plaintiff suffered damages”); Finger v.

Ray, 326 S.W.3d 285, 291 (Tex.App.--Houston [1st Dist.] 2010, no pet.) (“To prevail on

a breach of fiduciary duty claim, the plaintiff must prove that the defendant‟s breach of

their fiduciary duties proximately caused the plaintiff‟s damages”); State Bar of Tex.,

Texas Pattern Jury Charges: Business, Consumer, Insurance & Employment PJC

115.18 (2010) (applying proximate causation standard in question inquiring of actual

damages for breach of fiduciary duty). “The two elements of proximate cause are cause

in fact (or substantial factor) and foreseeability. . . . Cause in fact is established when

the act or omission was a substantial factor in bringing about the injuries, and without it,

the harm would not have occurred.” IHS Cedars Treatment Ctr. v. Mason, 143 S.W.3d
794, 798-99 (Tex. 2004). The elements of cause in fact and foreseeability cannot be

established by mere conjecture, guess or speculation. Doe v. Boys Clubs of Greater

Dallas, Inc., 907 S.W.2d 472, 477 (Tex. 1995).

       When a plaintiff alleges that some failure on an attorney‟s part caused an

adverse result in prior litigation, the plaintiff must produce evidence from which a jury

may reasonably infer that the attorney‟s conduct caused the damages alleged.

Alexander v. Turtur & Assocs., 146 S.W.3d 113, 117 (Tex. 2004); Schlager v. Clements,

939 S.W.2d 183, 186-87 (Tex.App.--Houston [14th Dist.] 1996, writ denied).             This

aspect of a malpractice plaintiff‟s causation burden is frequently referred to as the “suit-

within-a-suit” requirement. Tommy Gio, Inc. v. Dunlop, 348 S.W.3d 503, 507 (Tex.App.-

-Dallas 2011, pet. denied) (citing Greathouse v. McConnell, 982 S.W.2d 165, 173

(Tex.App.--Houston [1st Dist.] 1988, pet. denied)). On this record, we believe suit-

within-a-suit causation applies to Burnwood‟s breach of fiduciary duty claim, as well as
                                             7
to its professional negligence claim, because the damage alleged is the judgment it

suffered in the 2006-07 litigation.

        Burnwood presented its summary judgment evidence of causation through the

affidavit of a Texas board-certified personal injury trial attorney. The affidavit recited

facts and standards of conduct, expressing its author‟s opinion that the facts showed

CTHG breached its duties to Burnwood. It recited parts of Thornton‟s testimony in the

Cagle trial, and asserted that because the firm‟s prior dealings with Thornton and

Burnwood had not been made known, Burnwood “was deprived of” the ability to cross-

examine Thornton with the Outlaw letter and the jury did not hear of Thornton‟s effort “to

enforce a substantially similar insurance provision in a substantially similar lease.” In

the opinion of the author, CTHG obtained knowledge of the “inner workings” of

Burnwood during the period of the Cagle-Burnwood lease. This evidence, he added,

was presented at trial through the testimony of Thornton. The affidavit concluded with

the opinion that the actions of CTHG “constituted professional negligence that

proximately caused injury and harm to Burnwood, Inc., their former client.” Missing from

the affidavit, however, is any explanation, or even any statement of opinion, why cross

examination of Thornton or information about his actions vis-à-vis other lessees would

have countered his testimony that Ray did not enforce the insurance requirement

against Cagle, or how such information would have led to a different outcome in Cagle‟s

suit.

        The key inquiry here is how the asserted acts and omissions of CTHG

proximately caused injury to Burnwood. “[E]ven when negligence is admitted, causation

                                            8
is not presumed. . . .       Moreover, the trier of fact must have some basis for

understanding the causal link between the attorney‟s negligence and the client‟s harm.”

Alexander, 146 S.W.3d at 119 (citations omitted). This standard is not met through

expert testimony merely employing the term “proximate cause,” Chesser v. LifeCare

Mgmt. Servs., L.L.C., No. 10-0291-CV, 2011 Tex. App. Lexis 7159, at *17-18 (Tex.App.-

-Fort Worth Aug. 31, 2011, pet. filed) (citing Havner, 953 S.W.2d at 711-12), or

otherwise rendering an unsupported conclusion. McIntyre v. Ramirez, 109 S.W.3d 741,

749 (Tex. 2003) (noting conclusory statement of expert witness is insufficient to create a

question of fact); Ryland Group, Inc. v. Hood, 924 S.W.2d 120, 122 (Tex. 1996) (per

curiam) (“The relevant standard for an expert‟s affidavit opposing a motion for summary

judgment is whether it presents some probative evidence of the facts at issue. . . .

Conclusory affidavits are not enough to raise fact issues.” (citations omitted)). A matter

“is not so simply because „an expert says it is so‟ . . . When the expert „brings to court

little more than his credentials and a subjective opinion,‟ this is not evidence that would

support a judgment.” Havner, 953 S.W.2d 706 at 712 (quoting Viterbo v. Dow Chem.

Co., 826 F.2d 420, 421-422 (5th Cir. 1987)); see also Burrow v. Arce, 997 S.W.2d 229,

236 (Tex. 1999). Rather, “[t]he opinions must have a reasoned basis which the expert

because of his „knowledge, skill, experience, training, or education‟, (sic) is qualified to

state.” Burrow, 997 S.W.2d at 236 (citing Tex. R. Evid. 702).

       Here the attorney‟s conclusions of causation, offered without explanation of how

a jury in the retrial of the 2006-07 litigation would more likely than not return a verdict

favorable to Burnwood after hearing evidence of the terms of the Outlaw Sports and

Cold Stone leases, constitute no evidence of causation. See Volkswagen of Am., Inc. v.
                                             9
Ramirez, 159 S.W.3d 897, 905-06 (Tex. 2004) (finding expert‟s opinion on causation

constituted no evidence when he failed to explain how tests supported his opinion).

      We agree with the trial court‟s grant of summary judgment because we conclude

the summary judgment record presents no evidence the asserted breaches of duty by

CTHG were a cause in fact of damage to Burnwood. Because resolution of this issue

is dispositive of the case on appeal, it is unnecessary for us to consider Burnwood‟s

remaining issue. Tex. R. App. P. 47.1.

                                      Conclusion

      Finding no evidence of causation, we affirm the judgment of the trial court.

                                                      James T. Campbell
                                                           Justice

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