GUNTER STROMBERGER, INDIVIDUALLY AND ON BEHALF OF AUSTRIAN IMPORT SERVICES, INC. AND AUSTRIAN AMERICAN MINING PARTNERSHIP, Appellants v. LAW OFFICES OF WINDLE TURLEY, P.C. AND THOMAS J. STUTZ, Appellees

AFFIRM; Opinion issued October 16, 2007
 
 
 
In The
Court of Appeals
Fifth District of Texas at Dallas
............................
No. 05-06-00841-CV
............................
GUNTER STROMBERGER, INDIVIDUALLY AND
ON BEHALF OF AUSTRIAN IMPORT SERVICES, INC.
AND AUSTRIAN AMERICAN MINING PARTNERSHIP, Appellants
V.
LAW OFFICES OF WINDLE TURLEY, P.C. AND
THOMAS J. STUTZ, Appellees
.............................................................
On Appeal from the County Court at Law No. 1
Dallas County, Texas
Trial Court Cause No. cc-04-06545-a
.............................................................
MEMORANDUM OPINION
Before Justices Whittington, Wright, and FitzGerald
Opinion By Justice Whittington
        Gunter Stromberger, individually and on behalf of Austrian Import Services, Inc. and Austrian American Mining Partnership (AAMP) appeal the summary judgment granted in favor of the Law Offices of Windle Turley, P.C. (LOWT) and Thomas J. Stutz. In four issues, Stromberger and AAMP contend: (i) material facts exist precluding summary judgment on issues of limitations, laches, collectibility and fraud, (ii) the trial judge improperly applied the doctrine of collateral estoppel, (iii) fraud and fiduciary duty claims asserted against LOWT and Stutz were not impermissibly fractured legal malpractice claims, and (iv) lack of causation was not raised as a basis for summary judgment. We affirm the trial court's judgment.
 
Standard of Review
        The standard for reviewing a traditional summary judgment is well established. See Tex. R. Civ. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985). A defendant who moves for summary judgment must show the plaintiff has no cause of action. A defendant may meet this burden by either disproving at least one essential element of each theory of recovery or conclusively proving all elements of an affirmative defense. See Wornick Co. v. Casas, 856 S.W.2d 732, 733 (Tex. 1993). A matter is conclusively established if ordinary minds cannot differ as to the conclusion to be drawn from the evidence. See Triton Oil & Gas Corp. v. Marine Contractors & Supply, Inc., 644 S.W.2d 443, 446 (Tex. 1982). After the movant has established a right to summary judgment, the burden shifts to the nonmovant to present evidence creating a fact issue. See Kang v. Hyundai Corp., 992 S.W.2d 499, 501 (Tex. App.-Dallas 1999, no pet.).
        We review a no-evidence summary judgment under the same legal sufficiency standard used to review a directed verdict. See Tex. R. Civ. P. 166a(i); Gen. Mills Rests., Inc. v. Tex. Wings, Inc., 12 S.W.3d 827, 832-33 (Tex. App.-Dallas 2000, no pet.). Thus, we must determine whether the nonmovant produced more than a scintilla of probative evidence to raise a fact issue on the material questions presented. Gen. Mills, 12 S.W.3d at 833. When analyzing both traditional and no- evidence summary judgments, we consider the evidence in the light most favorable to the nonmovant. See Nixon, 690 S.W.2d at 549 (traditional summary judgment); Gen. Mills, 12 S.W.3d at 833 (no-evidence summary judgment).
The C&M Litigation
        In 1985, Stromberger hired Stutz, an attorney employed by LOWT, to represent him in a legal matter relating to claims against C&M Imports and Chris Nasrallah. C&M filed a state court action against MBank Grand Prairie (later taken over by the FDIC and removed to federal court), which in turn filed a third-party action against Stromberger (C&M litigation). Stromberger filed a cross-claim against C&M for damages and sued Nasrallah individually. The C&M litigation was administratively closed in 1989 following an FDIC settlement with C&M. In 1991 Stutz withdrew as Stromberger's attorney and sent the entire file to Stromberger's new attorney.
        In 1999, Stromberger sued Stutz and LOWT for legal malpractice, violation of the Texas Deceptive Trade Practices Act and other claims arising from the C&M litigation. In July 2003, after losing a motion for summary judgment filed by Stutz and LOWT, Stromberger non-suited his claims in Stromberger 1. The case proceeded to trial on Stutz and LOWT's counterclaim alleging Stromberger's claims under the DTPA were groundless and brought in bad faith. The trial court entered judgment in favor of Stutz and LOWT and the judgment was affirmed by this Court. See Stromberger v. Law Offices of Windle Turley and Thomas J. Stutz, No. 05-04-00050-CV, 2005 WL 701034 (Tex. App.-Dallas, March 28, 2005, no pet.). In June 2004, Stromberger individually and on behalf of Austrian Import Services, Inc. (AISI) filed this lawsuit against Stutz and LOWT (Stromberger 2), with most of the claims mirroring the claims asserted in Stromberger 1.
        In Stromberger 2, with regard to the C&M litigation, Stromberger alleged negligence and gross negligence, breach of fiduciary duty, and fraud. Stromberger claimed Stutz and LOWT failed to prosecute and complete the C&M litigation, lost relevant file materials, and did not advise him regarding the status of the federal lawsuit or that the federal lawsuit had been administratively closed.   See Footnote 1  In both Stromberger 1 and Stromberger 2, Stromberger denied knowing about the administrative closure of the federal lawsuit and Stutz's withdrawal until shortly before filing Stromberger 1 in 1999.
Statute of Limitations - Legal Malpractice Claim
 
        Stromberger's C&M litigation claims arising out of the rendering of legal services are governed by a two-year statute of limitations. See Sledge v. Alsup, 759 S.W.2d 1, 2 (Tex. App.-El Paso 1988, no writ). When a defendant moves for summary judgment based on the affirmative defense of limitations, the defendant assumes the burden of showing as a matter of law that the suit is barred by limitations. Rogers v. Ricane Enters., Inc., 772 S.W.2d 76, 80-81 (Tex. 1989). The defendant must conclusively prove when the cause of action accrued, and, if raised, negate the discovery rule by proving there is no genuine issue of material fact about when the plaintiff discovered, or in the exercise of reasonable diligence, should have discovered the nature of its injury. Burns v. Thomas, 786 S.W.2d 266, 267 (Tex. 1990). In addition to the discovery rule delaying accrual of the cause of action, the Hughes rule provides that, in certain types of legal malpractice actions, the statute of limitations may be tolled until the malpractice litigation is final. Hughes v. Mahaney & Higgins, 821 S.W.2d 154, 157 (Tex. 1991); Apex Towing Co. v. Tolin, 41 S.W.3d 118, 119 (Tex. 2001). As with the discovery rule, the defendant moving for summary judgment bears the burden of showing that the Hughes rule has not tolled limitations. See Nunez v. Caldarola, 56 S.W.3d 812, 815 (Tex. App.-Corpus Christi 2001, no pet.); Murphy v. Mullin Hoard & Brown, L.L.P., 168 S.W.3d 288, 291 (Tex. App.-Dallas 2005, no pet.).
        On appeal in Stromberger 1, Stromberger asserted that the discovery rule would have tolled the running of the statute of limitations. Stromberger's discovery rule argument was based on his claim that between 1991 and 1997, he was in contact with Stutz and “repeatedly assured that his case was proceeding normally and being properly handled . . . . given misleading, erroneous, and false information as to the status of his cases, and ultimately denied any information at all as to the matters he had entrusted to Defendants.” Stromberger further alleged that Stutz told him the federal case “would be held in suspense for some five to six years.” Stromberger also alleged he made repeated requests for information from Stutz and LOWT between 1991 and 1997 but received no response. He claimed he was denied access to his file and thus could not have known until 1997 that his federal court case was closed in 1989. In Stromberger 1, the trial judge found there was no evidence of Stromberger's alleged repeated contacts with Stutz during the 1990s and Stromberger lied about his claimed communications with Stutz. The trial judge further found that Stutz's entire file was turned over to Stromberger's new attorney eight years before Stromberger 1 was filed in 1999.
        In this appeal, Stromberger argues limitations did not begin to run on his C&M litigation claims until the July 2002 denial of the motion to reopen that case. The C&M litigation was administratively closed in November 1989. A motion to reopen the C&M litigation was denied on January 23, 2001. The denial of the motion to reopen an administratively closed matter in federal court has the practical effect of dismissing the case. Penn West Assocs., Inc. v. Cohen, 371 F.3d 118, 124 (3d Cir. 2004) (citing Brown Shoe Co. v. U.S., 370 U.S. 294, 306 (1962)) (denial of a motion to reopen an administratively closed matter in federal court has practical effect of dismissing the lawsuit and constitutes final decision which is appealable). The deadline for appeal of that decision expired 30 days later, on February 22, 2001. Fed. R. App. P. 4(a)(1)(A). No appeal was filed by Stromberger. The fact that Stromberger later filed an amended motion to reopen the C&M litigation in April 2001, which was also denied, does not change the fact that the denial of the motion to reopen on January 23, 2001 was an appealable dismissal of the case. Any tolling of limitations under Hughes ended more than two years prior to the filing of this case in 2004.         This suit was brought more than two years after Stromberger knew or should have known of alleged facts giving rise to a cause of action.   See Footnote 2  See Willis v. Maverick, 760 S.W.2d 642, 646 (Tex. 1988) (in legal malpractice case, limitations begins to run when plaintiff discovers or should have discovered through reasonable diligence facts establishing elements of his cause of action). The summary judgment evidence established as a matter of law that Stromberger was aware of the claims arising from the C&M litigation by October 1999 when he filed Stromberger 1. Any tolling under the Hughes rule ended more than two years prior to the filing of this lawsuit.
        The trial judge correctly granted summary judgment in favor of Stutz and LOWT on Stromberger's legal malpractice claim arising from the C&M litigation based on limitations. We overrule Stromberger's first issue.
Fracturing of Legal Malpractice Claim
        A legal malpractice claim sounds in negligence, and a plaintiff is not permitted to fracture a legal malpractice claim among differently labeled causes of action. See Black v. Wills, 758 S.W.2d 809, 814 (Tex. App.-Dallas 1988, no writ). “Although it has generally been recognized that there can be several theories under which recovery might be sought, the ultimate issue is whether there has been a breach of duty which causes damage.” Sledge, 759 S.W.2d at 2. See also Cuyler v. Minns, 60 S.W.3d 209, 216 (Tex. App.-Houston [14th Dist.] 2001, pet. denied) (breach of fiduciary duty and breach of contract claims based on same conduct as malpractice claim represented impermissible fracturing of legal malpractice claim); Ross v. Arkwright Mut. Ins. Co., 892 S.W.2d 119, 133-34 (Tex. App.-Houston [14th Dist.] 1994, no writ); Tacon Mech. Contractors, Inc. v. Aetna Cas. & Sur. Co., 65 F.3d 486, 488 (5th Cir. 1995) (under Texas law, impermissible to attempt to fracture one cause of action into three or four by massaging the labels and language); Nolan v. Foreman, 665 F.2d 738, 743 (5th Cir. 1982) (alleged breach of state bar rule duty to return client's papers was action for legal malpractice).
        The trial judge correctly granted the summary judgment on Stromberger's claims of breach of fiduciary duty and fraud. Based on the facts before us, Stromberger's claim is one for legal malpractice no matter what label is given the cause of action. See Willis v. Maverick, 760 S.W.2d 642 (Tex. 1988). The crux of Stromberger's complaint is that Stutz's and LOWT's negligence prevented him from winning the recovery he deserved. The claims of breach of fiduciary duty and fraud reiterated the facts forming the basis of Stromberger's cause of action for negligence. Thus, the claims for breach of fiduciary duty and fraud represented an impermissible fracturing of Stromberger's claim for legal malpractice. We overrule Stromberger's third issue.
Insurance Proceeds Claim
        In claims of theft and for conversion, Stromberger alleges that LOWT and Stutz failed to turn over all legal documents belonging to Stromberger and those documents were subsequently destroyed in a fire at LOWT. Stromberger claims that insurance proceeds paid to LOWT for documents destroyed in the fire constituted theft or conversion of money due Stromberger as a portion of these proceeds was allegedly attributable to Stromberger's file in the C&M litigation.
        The trial judge correctly applied the doctrine of collateral estoppel in granting LOWT and Stutz summary judgment as to Stromberger's claims of theft and conversion of insurance proceeds. Collateral estoppel promotes judicial efficiency and precludes inconsistent judgments by preventing the relitigation of any ultimate fact issue previously litigated even though the subsequent suit brings a different cause of action. Tex. Dep't of Pub. Safety v. Petta, 44 SW.3d 575, 579 (Tex. 2001); Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 521 (Tex. 1998). When asserted against a party who was actually a party in the first action, the doctrine of collateral estoppel bars relitigation of fact issues that were fully and fairly litigated and that were essential to the prior judgment. Johnson & Higgins, 962 S.W.2d at 519.
        In Stromberger 1, Stromberger claimed legal malpractice, DTPA violations, fraud, and breach of fiduciary duty in connection with Stutz's representation of Stromberger while Stutz was employed by LOWT. The trial judge granted summary judgment in favor of LOWT and Stutz on several claims. Days before the scheduled July 2003 trial, Stromberger non-suited his remaining claims, and the case proceeded to trial only on LOWT and Stutz's DTPA bad faith counterclaim. After hearing the evidence, the trial judge concluded Stromberger's DTPA claims were groundless and brought in bad faith.
        Included in the trial judge's findings of fact and conclusions of law in Stromberger 1 are the following factual findings: (i) In 1991 Stromberger requested Stutz to turn over Stromberger's files to attorney Tom Nash, which Stutz did shortly before he withdrew from representing Stromberger, and (ii) Stromberger persisted in claiming Stutz had never turned over Stromberger's file materials and that those materials were then destroyed in a fire at the LOWT offices some years later. Stutz testified he sent all original file materials to attorney Nash in 1991, well before the 1994 fire that destroyed some file materials at the LOWT offices. Stutz also produced documentary evidence to support his testimony; Stromberger offered no controverting evidence to this testimony. (iii) Stromberger lied about his communications with Stutz, and whatever the status of the C&M litigation, Stutz's entire file was turned over to Nash eight years before Stromberger 1 was filed.
        Despite those factual findings in Stromberger 1, Stromberger alleges conversion and theft of insurance proceeds for fire damage at the office of LOWT. Under the doctrine of collateral estoppel, Stromberger is prohibited from relitigating issues of fact actually litigated and essential to the DTPA counterclaim judgment in Stromberger 1. See Fiallos v. Pagan-Lewis Motors, Inc., 147 S.W.3d 578, 584 (Tex. App.-Corpus Christi 2004, pet. denied). We overrule Stromberger's second issue.
The Harwood Case
        In addition to the claims regarding the C&M litigation, AAMP asserted claims against LOWT and Stutz arising from their representation in another lawsuit, Austrian American Mining Partnership v. Harwood. In the Harwood case, AAMP, a company in which Stromberger was general partner and majority owner, sought an accounting and damages. The Harwood case, filed in 1987, was non-suited in 1988. AAMP alleges that Stutz represented that he had obtained a default judgment in the Harwood case and that Stutz non-suited the case without Stromberger's knowledge or permission. AAMP alleges Stutz “breached his fiduciary duty of honesty and full disclosure and defrauded the Plaintiff” resulting in damages.
        LOWT and Stutz moved for summary judgment on the Harwood claims, asserting there was no evidence that any act or omission of LOWT or Stutz caused any damage to AAMP, including no evidence that any judgment obtained in the Harwood case would have been recoverable and collectible.
        As discussed with regard to impermissible fracturing of a legal malpractice claim, we conclude the facts underlying these tort claims would only support a claim for legal malpractice. To recover on a legal malpractice claim, a plaintiff must prove the defendant owed the plaintiff a duty, the defendant breached that duty, the breach proximately caused the plaintiff injury, and damages occurred. Cosgrove v. Grimes, 774 S.W.2d 662, 665 (Tex. 1989).
        The trial judge correctly granted LOWT and Stutz judgment as a matter of law on AAMP's Harwood claims, because there was no evidence that any alleged breach of duty by LOWT or Stutz proximately caused AAMP damages or that damages could have been recoverable. See Schlager v. Clements, 939 S.W.2d 183, 189 (Tex. App.-Houston [14th Dist.] 1996, writ denied) (summary judgment proper in absence of competent evidence of damage as a result of attorney's actions or inactions); Williams v. Briscoe, 137 S.W.3d 120, 124 (Tex. App.-Houston [1st Dist.] 2004, no pet.) (evidence that damages could have been collected required, because, even if attorney's negligence prevented entry of judgment in client's favor, client suffered no damage unless he could have collected some part of judgment). We overrule the fourth issue.
        We affirm the trial court's judgment.
 
 
                                                          
                                                          MARK WHITTINGTON
                                                          JUSTICE
 
060841F.P05
 
Footnote 1 We do not address any claims made with regard to AISI. Stromberger's brief has no substantive analysis, discussion, or legal authority to support a contention, if any, that the trial judge erred in granting summary judgment in favor of LOWT and Stutz as to AISI's claims.
Footnote 2 In Stromberger 1 the trial judge found as a matter of law that Stromberger was aware of the facts and circumstances allegedly supporting his claims before 1997.