Christine Finger v. Hugh M. Ray, III and Weycer, Kaplan Pulaski & Zuber, P.C.--Appeal from 151st District Court of Harris County
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Opinion issued August 5, 2010
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-09-00404-CV
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CHRISTINE FINGER, Appellant
V.
HUGH M. RAY, III AND WEYCER, KAPLAN,
PULASKI, AND ZUBER, P.C., Appellees
On Appeal from the 151st District Court
Harris County, Texas
Trial Court Case No. 2007-71210
DISSENTING OPINION
The majority errs in holding that appellant, Christine Finger, needed expert
testimony to prove the causal connection between the alleged misrepresentations
made to her by appellee, Hugh M. Ray, III, and her loss of $23,500, the amount
she seeks in restitution for attorney‘s fees that she paid to Ray and his law firm
based on the alleged misrepresentations. Finger is not seeking damages for what
she would have recovered due to Ray‘s negligence in representing her. Rather, as
she notes, ―it is crystal clear that the economic damages sought by [her] [are] in the
nature of restitution for the loss of her fees paid to Ray and appellee, Weycer,
Kaplan, Pulaski, and Zuber, P.C. (collectively ―Ray‖), . . . because of intentional
false representation[s] made to her by Ray . . . .‖
I would hold that Finger‘s claims are independent of a claim for legal
malpractice and require no expert testimony to raise a fact issue on causation. The
majority errs in holding to the contrary. Accordingly, I dissent.
Background
Finger obtained a judgment against David Reitman for $29,495 in damages
and $1,200 in attorney‘s fees in settlement of a breach of contract claim against
him. Reitman then filed for bankruptcy protection. Finger hired Ray to represent
her during the process of collecting her judgment from Reitman and in any
potential bankruptcy litigation.
Finger hired Ray based upon his ―express representations . . . that he would
collect [her] judgment through state court collection methods that would also
provide [her] with attorneys fees and costs of pursuit and collection[;] . . . the
judgment that [she] possessed was based upon fraud by Mr. Reitman[;] . . . if Mr.
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Reitman filed personal bankruptcy then he, Mr. Ray, would file an action in the
bankruptcy court to except [her] claim out of the bankruptcy[;] and . . . [Ray]
would further proceed with the collection outside of any bankruptcy proceeding.‖
Ray did not file a ―section 523 action‖ to remove Reitman‘s debt to Finger from
discharge.1 Rather, he filed a ―section 727 action‖ to bar Reitman‘s bankruptcy
discharge.2 Ultimately, the bankruptcy court approved a settlement between Finger
and Reitman for $40,700. Finger then paid $23,500 to Ray for fees and expenses,
and she retained $17,200 from the settlement.
Finger, in her original petition, sued Ray for legal malpractice, breach of
fiduciary duties, breach of contract, and violations of the Texas Deceptive Trade
Practices Act (―DTPA‖),3 which she alleged were based on Ray‘s false
representations to her that he would take certain steps to collect her judgment
against Reitman. Finger alleged that these representations induced her to hire Ray
and his firm, and Ray billed and collected excessive and unreasonable attorney‘s
fees from her. Finger sought as damages the attorney‘s fees and expenses that she
had paid to Ray, $225,000 in mental anguish damages, an equitable fee forfeiture,
a declaration that Ray breached the employment contract, and attorney‘s fees.
1
See 11 U.S.C. § 523 (2006).
2
See 11 U.S.C. § 727 (2006).
3
See TEX. BUS. & COM. CODE ANN. §§ 17.46, 17.50 (Vernon Supp. 2009).
3
However, in her second amended petition, Finger dropped her legal malpractice
and breach of contract claims after Ray filed his summary judgment motion.
Standard of Review
To prevail on a summary judgment motion, a movant has the burden of
proving that he is entitled to judgment as a matter of law and that there is no
genuine issue of material fact. TEX. R. CIV. P. 166a(c); Cathey v. Booth, 900
S.W.2d 339, 341 (Tex. 1995). When a defendant moves for summary judgment,
he must either (1) disprove at least one essential element of the plaintiff‘s cause of
action or (2) plead and conclusively establish each essential element of his
affirmative defense, thereby defeating the plaintiff‘s cause of action. Cathey, 900
S.W.2d at 341; Yazdchi v. Bank One, Tex., N.A., 177 S.W.3d 399, 404 (Tex.
App.—Houston [1st Dist.] 2005, pet. denied). A defendant moving for a noevidence summary judgment must allege that there is no evidence of an essential
element of the non-movant‘s cause of action. TEX. R. CIV. P. 166a(i); Fort Worth
Osteopathic Hosp., Inc. v. Reese, 148 S.W.3d 94, 99 (Tex. 2004). The non-movant
must then produce ―more than a scintilla of evidence‖ to create a genuine issue of
material fact on the challenged elements. Ford Motor Co. v. Ridgway, 135 S.W.3d
598, 600 (Tex. 2004). When deciding whether there is a disputed, material fact
issue precluding summary judgment, evidence favorable to the non-movant will be
taken as true. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex.
4
1985). Every reasonable inference must be indulged in favor of the non-movant
and any doubts must be resolved in her favor. Id. at 549.
Causation Evidence
In her sole issue, Finger argues that the trial court erred in rendering
summary judgment in favor of Ray because Texas law does not require expert
testimony regarding a causal connection between an alleged misrepresentation and
out-of-pocket damages for money paid in reliance upon the misrepresentation. She
asserts that her DTPA and breach of fiduciary duty claims are not ―fractures‖ of a
professional negligence claim. Rather, they are separate and independent claims
based not on Ray‘s legal representation of her but on his misrepresentations that
induced her to hire him. In effect, she asserts that she was induced into hiring Ray
for services she did not want or need.
Finger’s Claims
Attorneys owe a duty to their clients to act with ordinary care, and
―[c]omplaints about an attorney‘s care, skill, or diligence in representing a client
implicate this duty of ordinary care and sound in negligence.‖ Beck v. Law Offices
of Edwin J. (Ted) Terry, Jr., P.C., 284 S.W.3d 416, 426 (Tex. App.—Austin 2009,
no pet.). A lawyer ―can commit professional negligence by giving an erroneous
legal opinion or erroneous advice, by delaying or failing to handle a matter
entrusted to the lawyer‘s care, or by not using a lawyer‘s ordinary care in
5
preparing, managing, and prosecuting a case.‖ Murphy v. Gruber, 241 S.W.3d
689, 693 (Tex. App.—Dallas 2007, pet. denied). Such claims for negligence may
not be fractured into separate non-negligence claims, such as breach of fiduciary
duty or DTPA claims because ―the real issue remains one of whether the
professional exercised that degree of care, skill, and diligence that professionals of
ordinary skill and knowledge commonly possess and exercise.‖
Kimleco
Petroleum, Inc. v. Morrison & Shelton, 91 S.W.3d 921, 924 (Tex. App.—Fort
Worth 2002, pet. denied) (citing Averitt v. PriceWaterhouseCoopers L.L.P., 89
S.W.3d 330, 334 (Tex. App.—Fort Worth 2002, no pet.)).
However, the rule against fracturing professional negligence claims does not
preclude a client from simultaneously asserting both negligence and nonnegligence claims that arise out of common facts. Beck, 284 S.W.3d at 427 (citing
Deutsch v. Hoover, Bax & Slovacek, L.L.P., 97 S.W.3d 179, 189 (Tex. App.—
Houston [14th Dist.] 2002, no pet.)). To do so, the client must ―present a claim
that goes beyond what traditionally has been characterized as legal malpractice,‖
and not ―merely reassert the same claim for legal malpractice under an alternative
label.‖ Duerr v. Brown, 262 S.W.3d 63, 70 (Tex. App.—Houston [14th Dist.]
2008, no pet.). Whether a claim is a claim for professional negligence is a question
of law, and we are not bound by the labels the parties place on the claims. Beck,
284 S.W.3d at 427–428. Regardless of the pleaded theory, if the crux of the
6
complaint is that a plaintiff‘s attorney did not provide adequate legal
representation, the claim is one for legal malpractice. Kimleco Petroleum, 91
S.W.3d at 924. Courts are to focus on whether ―the facts that are the basis for an
asserted cause of action implicate only the lawyer‘s duty of care or independently
actionable fiduciary, statutory, contractual, or other tort duties.‖ Beck, 284 S.W.3d
at 428; see also Deutsch, 97 S.W.3d at 189–90 (if client‘s complaint more
appropriately classified as fraud, DTPA, breach of fiduciary duty, or breach of
contract, then client can assert claim other than professional negligence).
DTPA Violations
In her second amended petition, Finger alleges that during Ray‘s
representation of her, he ―committed breaches of fiduciary duties and violated
[section] 17.46(b)(5)(7)(12) and (24) and [section] 17.50(a)(3)‖ of the DTPA by
knowingly and intentionally (1) falsely representing to Finger that he would except
her judgment against Reitman from Reitman‘s bankruptcy; (2) falsely representing
to Finger that he would seize Reitman‘s property separately from the bankruptcy
proceeding to satisfy the judgment; (3) falsely representing to Finger that he would
file a Section 523 action to except Finger‘s judgment from discharge; (4) failing to
disclose that he would not file an action to except Finger‘s judgment from
Reitman‘s discharge to induce her into employing Ray, which she would not have
done if Ray had disclosed that he would not file a Section 523 action; and (5)
7
billing and collecting excessive and unreasonable fees because his services were
worthless and obtained under false pretenses.
In determining whether a claim is merely one for professional negligence or
one for DTPA violations, we consider the ―difference between negligent conduct
and deceptive conduct.‖ Latham v. Castillo, 972 S.W.2d 66, 69 (Tex. 1998).
Finger‘s allegations against Ray go beyond mere negligence, and instead involve
deception and misrepresentations made to secure employment. See Trousdale v.
Henry, 261 S.W.3d 221, 232 (Tex. App.—Houston [14th Dist.] 2008, pet. denied);
see also Tolpo v. DeCordova, 146 S.W.3d 678, 685 (Tex. App.—Beaumont 2004,
no pet.) (per curiam) (plaintiff‘s failure to contend that defendant-attorney
knowingly excluded required contract term or affirmatively misrepresented effect
of contract did not support independent DTPA claim, separate from plaintiff‘s
legal malpractice claim).
In Aiken v. Hancock, the San Antonio Court of Appeals distinguished
between deceptive and negligent conduct. 115 S.W.3d 26, 29 (Tex. App.—San
Antonio 2003, pet. denied). The plaintiff alleged that his attorney (1) falsely
represented that he was prepared to try the plaintiff‘s case, (2) failed to reveal that
he was not prepared to try the case, (3) falsely represented that an expert witness
was prepared to testify, and (4) failed to reveal that the expert witness was not so
prepared. Id. The court concluded that this conduct was ―conceivably negligent,‖
8
but not deceptive, and therefore the plaintiff‘s allegations did not support an
independent DTPA claim. Id.
Here, however, Finger alleges that, to induce her into employing his firm,
Ray willfully made misrepresentations to her regarding the actions that he would
take to collect her judgment against Reitman. The gist of Finger‘s complaints
against Ray is not that he gave her bad legal advice or did not adequately represent
her, but that he deceived her into unnecessarily hiring him.
See Kimleco
Petroleum, 91 S.W.3d at 924; Greathouse v. McConnell, 982 S.W.2d 165, 172
(Tex. App.—Houston [1st Dist.] 1998, pet. denied). Finger has not alleged that
Ray negligently informed her that her judgment against Reitman could be excepted
from the bankruptcy discharge, but she instead alleges and presented some
evidence that Ray made affirmative misrepresentations and engaged in deceptive
conduct to induce Finger into hiring him.4 See Latham, 972 S.W.2d at 69 (had
plaintiffs alleged that defendant ―negligently failed to timely file their claim‖ and
not that he had affirmatively misrepresented that he had filed and was pursuing
claim, then claim would properly be one for legal malpractice).
Ray argues that he cannot be held liable for any representations he made
based upon his ―professional judgment‖ because his conduct falls within the
4
In its order granting and denying Ray‘s summary judgment in part, the trial court
found that ―there is at least a scintilla of evidence as to whether Defendants made
a misrepresentation to Plaintiff.‖ Ray does not cross-appeal this ruling.
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―professional services exemption‖ to the DTPA.
The Texas Legislature has
specifically provided that the DTPA does not apply to ―a claim for damages based
upon the rendering of professional service, the essence of which is the providing of
advice, judgment, opinion, or similar professional skill.‖ TEX. BUS. & COM. CODE
ANN. § 17.49(c) (Vernon Supp. 2009). Ray, however, raised the professional
services exemption in his no-evidence motion for summary judgment, stating that
legal services fall within the exemption. No-evidence summary judgment is only
appropriate for essential elements of a claim or defense upon which the adverse
party bears the burden of proof at trial. TEX. R. CIV. P. 166a(i). The professional
services exemption from DTPA liability ―is properly characterized as an
affirmative defense that must be pleaded because it is a plea of confession and
avoidance.‖ Head v. US Inspect DFW, Inc., 159 S.W.3d 731, 740 (Tex. App.—
Fort Worth 2005, pet. denied); Cole v. Central Valley Chemicals, Inc., 9 S.W.3d
207, 210 (Tex. App.—San Antonio 1999, pet. denied). As an affirmative defense,
Ray bore the burden to prove that his services fell within the section 17.49(c)
exemption, and, thus, he could not move for no-evidence summary judgment on
this ground. Section 17.49(c) also includes several exceptions to the exemption,
three of which involve express misrepresentations of material facts and
unconscionable actions that cannot be characterized as advice, judgment or
opinion, and failure to disclose information in violation of section 17.46(b)(24).
10
See TEX. BUS. & COM. CODE ANN. § 17.49(c)(1)–(3).
Because Ray did not
establish as a matter of law that his alleged misrepresentations did not fall within
the exceptions to the professional services exemption, he is not entitled to
summary judgment on the basis of this exemption. See Gibson v. Ellis, 58 S.W.3d
818, 826 (Tex. App.—Dallas 2001, no pet.) (where defendant did not address
misrepresentations alleged in plaintiff‘s DTPA claim, defendant did not establish
as matter of law that representations did not fall within section 17.49(c)
exceptions). I would, therefore, hold that Finger has sufficiently alleged a claim
for violations of the DTPA independent from a claim of legal malpractice.5
Breach of Fiduciary Duty
In addition to the duty to act with ordinary care, attorneys also owe fiduciary
duties to their clients. Willis v. Maverick, 760 S.W.2d 642, 645 (Tex. 1988). The
attorney-client relationship ―is one for the most abundant good faith, requiring
absolute perfect candor, openness and honesty, and the absence of any
concealment or deception.‖ Goffney v. Rabson, 56 S.W.3d 186, 193 (Tex. App.—
Houston [14th Dist.] 2001, pet. denied). In representing a client, an attorney must
5
Finger alleges that Ray violated five different sections of the DTPA, including
section 17.46(b)(5), which prohibits the representation of services as one quality
when they are really of another. The Fourteenth Court of Appeals has previously
held that alleging a violation of this section of the DTPA is a ―recast claim for
legal malpractice.‖ See Goffney v. Rabson, 56 S.W.3d 186, 192 (Tex. App.—
Houston [14th Dist.] 2001, pet. denied). Sections 17.46(b)(7) and (12) prohibit
similar representations. See TEX. BUS. & COM. CODE ANN. §§ 17.46(b)(7), (12).
11
―render a full and fair disclosure of facts material to the client‘s representation.‖
Beck, 284 S.W.3d at 429 (quoting Willis, 760 S.W.2d at 645). Thus, a professional
negligence claim focuses on ―whether an attorney represented a client with the
requisite level of skill,‖ while a breach of fiduciary duty claim focuses on ―whether
an attorney obtained an improper benefit from representing the client.‖ Beck, 284
S.W.3d at 429 (quoting Murphy, 241 S.W.3d at 693). A breach of fiduciary duty
―most often involves the attorney‘s failure to disclose conflicts of interest, failure
to deliver funds belonging to the client, placing personal interests over the client‘s
interests, improper use of client confidences, taking advantage of the client‘s trust,
engaging in self-dealing, and making misrepresentations.‖ Goffney, 56 S.W.3d at
193.
In Goffney, the plaintiff alleged that the defendant abandoned her at trial, did
not properly prepare for trial, and misled her into believing that the case had been
properly prepared. The court held that the plaintiff‘s allegations did not ―amount
to [allegations of] self-dealing, deception, or misrepresentations‖ sufficient to
support a separate cause of action for breach of fiduciary duty.‖ Id. at 194. In
Beck, the plaintiff contended that the law firm‘s failure to disclose the attorney‘s
substance abuse problems breached the attorneys‘ fiduciary duties and resulted in
an improper benefit—the attorney‘s fees paid by the plaintiff. See Beck, 284
S.W.3d at 431, 433. The court held that the firm‘s expectation of receiving fees
12
from their continued representation of the plaintiff did not convert what was
essentially a professional negligence claim into a claim for breach of fiduciary duty
because the plaintiff ―did not allege that the [firm‘s] failure to disclose the
[attorney‘s] ‗alcohol and substance abuse addictions‘ had anything to do with the
pursuit of attorney‘s fees or an improper benefit.‖ Id. at 434; see also Murphy, 241
S.W.3d at 699 (holding that plaintiffs did not state independent claim for breach of
fiduciary duty when they did not allege that lawyers deceived them, pursued own
pecuniary interests, or obtained improper benefit by continuing to represent both
clients).
In contrast, Finger alleges that Ray made affirmative misrepresentations to
her and engaged in deceptive conduct to induce her to hire his firm. Unlike in
Beck, where the firm‘s receipt of attorney‘s fees for an improper benefit was not
the focus of the plaintiff‘s complaint, here, Ray‘s receipt of attorney‘s fees based
on his misrepresentation is the basis of Finger‘s suit. See Beck, 284 S.W.3d at
433–34. Finger‘s complaint is not ultimately about the quality of representation
that she received, but that Ray‘s misrepresentations induced her to unnecessarily
hire an attorney, which she would not have done had Ray not made the
misrepresentations. Accordingly, I would hold that Finger has sufficiently alleged
a claim for breach of fiduciary duty independent from a claim of legal malpractice.
13
Expert Testimony Not Required
Because Finger‘s claims for DTPA violations and breach of fiduciary duty
are independent of any claims for legal malpractice, expert testimony is not
required to prove causation of her damages, an issue that is within the common
experience of lay persons.
To prevail on a DTPA claim, a plaintiff must prove that a defendant‘s
statutory violation is a producing cause of the injury. TEX. BUS. & COM. CODE
ANN. § 17.50(a) (Vernon Supp. 2009); Alexander v. Turtur & Assocs., Inc., 146
S.W.3d 113, 117 (Tex. 2004); Hoover v. Larkin, 196 S.W.3d 227, 232 (Tex.
App.—Houston [1st Dist.] 2006, pet. denied) (―A plaintiff may recover all
damages, including attorney‘s fees, that are the result of the defendant‘s wrongful
acts, but the burden remains on the plaintiff to demonstrate such causation.‖). A
plaintiff must establish that an ―unbroken causal connection‖ exists between the
actionable misrepresentation and the plaintiff‘s injury.
Doe v. Boys Clubs of
Greater Dallas, Inc., 907 S.W.2d 472, 481 (Tex. 1995).
To prevail on a breach of fiduciary duty claim, a plaintiff must prove that the
defendant‘s breach of his fiduciary duties proximately caused the plaintiff‘s
damages. Abetter Trucking Co. v. Arizpe, 113 S.W.3d 503, 508 (Tex. App.—
Houston [1st Dist.] 2003, no pet.).
Both proximate and producing cause
encompass causation in fact, which requires proof that a defendant‘s act or
14
omission was a substantial factor in bringing about the injury, without which the
injury would not have occurred. Prudential Ins. Co. of Am. v. Jefferson Assocs.,
896 S.W.2d 156, 161 (Tex. 1995); Thomas v. CNC Invs., L.L.P., 234 S.W.3d 111,
124 (Tex. App.—Houston [1st Dist.] 2007, no pet.). In addition to cause in fact,
proximate cause also requires foreseeability.
See Lee Lewis Constr., Inc. v.
Harrison, 70 S.W.3d 778, 785 (Tex. 2001); Thomas, 234 S.W.3d at 124.
In a claim for professional negligence arising from prior litigation, to
establish causation, a plaintiff must prove a ―suit within a suit,‖ i.e., but for the
attorney‘s breach of his duty, the plaintiff would have prevailed in the underlying
case. Hoover, 196 S.W.3d at 231. The fact finder must have some basis for
understanding the causal link between the attorney‘s negligence and the injury, and
although the client‘s lay testimony may provide this link, in some cases the
―connection may be beyond the jury‘s common understanding and require expert
testimony.‖ Alexander, 146 S.W.3d at 119. However, as previously discussed,
Finger‘s claims against Ray are not merely disguised professional negligence
claims, but are independent claims for breach of fiduciary duty and DTPA
violations. Neither claim requires Finger to prove ―suit within a suit‖ causation.
Latham, 972 S.W.2d at 69.
In its summary judgment order, the trial court acknowledged that, generally,
expert testimony is not necessary to prove causation for DTPA and breach of
15
fiduciary duty claims. The trial court then, however, ruled that Finger did need
expert testimony to create a fact issue on causation because all of her claims are
―essentially claims that but for the alleged misrepresentations by [Ray] about
proceeding under section 523 as opposed to section 727 of the bankruptcy code,
[Finger] would have simply filed a claim in the bankruptcy court and settled her
claim with the bankrupt debtor or otherwise recovered more than she netted based
upon [Ray‘s] efforts.‖ According to the trial court, Finger ―required a bankruptcy
law expert to create a fact issue on her ability to have, at a minimum, collected
more than what she netted in this case had she done as she claims she could have
and merely ‗filed a claim.‘‖ If Finger had alleged that she could have collected
more than Ray negotiated, given that the bankruptcy judge must approve all
settlements of claims against the debtor, to raise a fact issue on causation, Finger
would indeed have needed testimony about what the bankruptcy judge would do,
which requires expert testimony. See Alexander, 146 S.W.3d at 119 (decisionmaker bankruptcy judge did not testify regarding how he might have ruled if case
had been presented differently, leaving jury without expert testimony explaining
legal significance of omitted evidence).
Finger, however, did not allege that, had she not hired Ray, she could have
collected more than the $40,700 settlement Ray negotiated with Reitman or would
have netted more than $17,200 in a settlement with Reitman. Rather, Finger
16
asserts that had Ray not made affirmative misrepresentations, she would not have
hired him at all, and would not have incurred $23,500 in attorney‘s fees. Finger
might not have reached a settlement amount of $40,700 with Reitman without
Ray‘s assistance, but regardless of what amount she would ultimately have
recovered from Reitman, she would not have expended $23,500 in attorney‘s fees.
In support of her position, Finger relies on Streber v. Hunter, 221 F.3d 701,
726–27 (5th Cir. 2000) and Delp v. Douglas, 948 S.W.2d 483, 495–96 (Tex.
App.—Fort Worth 1997), rev’d on other grounds, 987 S.W.2d 879 (Tex. 1999).
Ray contends that this case is factually distinguishable from Streber and Delp. He
asserts that the plaintiffs in those cases were the ―decision-makers‖ whereas here,
the ―ultimate decision-maker‖ was the bankruptcy judge, who would determine
whether Finger was entitled to a greater recovery than the one negotiated with
Reitman by Ray. He argues, thus, that expert testimony was required to prove
what the bankruptcy judge could or would do under the particular facts. See
Streber, 221 F.3d at 726–27; Delp, 948 S.W.2d at 495–96.
However, the Texas Supreme Court, in distinguishing both Streber and Delp
from the facts before it in Alexander, noted that, in both cases, ―because of [the
plaintiffs‘] lawyers‘ bad advice, [the plaintiffs] made the decision and took the
actions that resulted in their injuries.‖ Alexander, 146 S.W.3d at 119. On the other
hand, the issue in Alexander involved whether a bankruptcy judge would have
17
decided the underlying case differently if another lawyer at the firm had handled
the adversary proceeding. See id. at 118–19. Thus, the bankruptcy judge was the
―decision maker,‖ and the plaintiff had to produce expert testimony on how the
judge would have ruled had the case been tried with a different attorney. Id.
Here,
in
contrast,
Finger
alleges
that
in
making
affirmative
misrepresentations about the recovery that could be obtained and the procedures
that Ray would use to obtain that recovery, Ray induced Finger into hiring him and
his firm and paying them $23,500 in attorney‘s fees.
Regardless of what
settlement amount the bankruptcy judge would have approved if Finger herself had
negotiated with Reitman, Finger asserts that she would not have hired Ray and
paid $23,500 in fees had the misrepresentations not been made. On her own,
Finger might have recovered the same amount that Ray had negotiated, or even
less, but Ray would not have obtained her money in payment of his attorney‘s fees.
Based on Ray‘s misrepresentations, Finger made the decision to hire him instead of
proceeding on her own to collect her judgment from Reitman, and this caused her
to incur $23,500 in attorney‘s fees to Ray. Like the plaintiffs in Streber and Delp,
Finger was the ―key decision maker.‖
Because the causal link between Ray‘s alleged misrepresentations and
Finger‘s alleged injury, her payment of $23,500 to Ray, is not beyond the common
understanding of the jurors, Finger need not produce expert testimony to raise a
18
fact issue on causation in regard to her DTPA and breach of fiduciary claims. See
Alexander, 146 S.W.3d at 119–20; Streber, 221 F.3d at 726–27; Delp, 948 S.W.2d
at 495–96.
Finger’s Lay Testimony
Finally, within her sole issue, Finger further argues that the trial court erred
in sustaining Ray‘s objections to her affidavit testimony, which created a material
fact issue on the element of causation.
Ray made five objections to various
statements in Finger‘s affidavit.6 He objected on hearsay and speculation grounds
to Finger‘s assertion that, upon Reitman‘s bankruptcy, ―[she] would have simply
filed [her] claim with the bankruptcy court and negotiated with Mr. Reitman on the
settlement that [she] knew he would make, based upon conversations with him,
and would not have paid Mr. Ray and his law firm from [her] own funds the sum
of $23,500.‖ The trial court sustained these objections. Ray also objected to
Finger‘s statement that she would have been able to achieve the same settlement
without paying $23,500 to Ray as speculative, conclusory, hearsay, and not based
on personal knowledge. He also asserted that Finger, in her affidavit, did not
affirmatively indicate that she is competent to testify on this matter. The trial court
also sustained these objections.
Regardless, Ray only objected to select statements made by Finger in her
6
Although the trial court sustained four of Ray‘s five objections, Finger only
challenges two of those rulings on appeal.
19
affidavit. Ray did not object to Finger‘s testimony that he misrepresented the
actions he would pursue in collecting her judgment against Reitman or her
testimony that, but for his express misrepresentations, she would not have hired
him and paid $23,500 in attorney‘s fees. Ray also did not object to Finger‘s
testimony that his representations were ―false, serious, and willfully made‖ or that,
although he could have ―easily checked with the state court file to determine
whether [Finger] was eligible for an action to take [her] judgment out of personal
bankruptcy of Mr. Reitman,‖ he did not do so, ―but instead made the
representations that caused [Finger] to pay him and his law firm $23,500.‖ Even
excluding Finger‘s testimony on which the trial court sustained Ray‘s objections,
the remainder of Finger‘s testimony is sufficient to raise a genuine issue of
material fact on the question of causation.
20
Conclusion
I would hold that Finger has, independent of any claim for legal malpractice,
alleged claims for breach of fiduciary duty and under DTPA sections 17.46(b)(24)
and 17.50(a)(3), which do not require expert testimony on the issue of causation.
Accordingly, I would sustain Finger‘s sole issue and remand the case to the trial
court.
Terry Jennings
Justice
Panel consists of Justices Jennings, Hanks, and Bland.
Justice Jennings dissenting.
21
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