Charles W. Burnett v. David Sharp--Appeal from 412th District Court of Brazoria County
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Affirmed in Part; Reversed and Remanded in Part; Majority and Concurring and
Dissenting Opinions filed October 21, 2010.
In The
Fourteenth Court of Appeals
___________________
NO. 14-09-00420-CV
___________________
CHARLES W. BURNETT, Appellant
V.
DAVID SHARP, Appellee
On Appeal from the 412th District Court
Brazoria County, Texas
Trial Court Cause No. 51711
CONCURRING AND DISSENTING OPINION
I agree that the district court‟s order operates as a dismissal of inmate Charles W.
Burnett‟s in forma pauperis action against his former attorney, David Sharp, under Chapter
14 of the Texas Civil Practice and Remedies Code. See Minix v. Gonzales, 162 S.W.3d
635, 637 (Tex. App.—Houston [14th Dist.] 2005, no pet.) (citing Tex. Civ. Prac. & Rem.
Code Ann. §§ 14.003(a)(2), (b)(2) (Vernon 2009)). I also agree that the trial court
properly dismissed Burnett‟s “negligence” claim against Sharp because that claim has no
arguable basis in law under section 14.003(b)(2).
My disagreements focus on (1) the characterization of Burnett‟s remaining claims
against Sharp; (2) the explanation for an expansive characterization of Burnett‟s remaining
claims based upon the absence of special exceptions in a suit that was dismissed before
service; and (3) the breach of fiduciary duty analysis.
This court should affirm the trial court‟s dismissal of the “legal malpractice” claims
Burnett labeled in his original petition as “breach of fiduciary duty,” “deception,” and
“negligence.” It should reverse only the trial court‟s determination that dismissal is with
prejudice, and affirm the trial court‟s judgment as modified to specify that dismissal is
without prejudice. This court‟s disposition is erroneous insofar as it reverses the trial
court‟s judgment as to breach of fiduciary duty and remands that claim for further
consideration, along with claims for conversion and money had and received that Burnett
did not assert.
Therefore, I join only sections I., II.A., and II.C.3. of this court‟s opinion.
I
concur in this court‟s judgment in part and respectfully dissent in part.
Analysis
We usually apply an abuse of discretion standard to review dismissal of claims
brought in forma pauperis by an inmate. Hickman v. Adams, 35 S.W.3d 120, 123 (Tex.
App.—Houston [14th Dist.] 2000, no pet.). But when a lawsuit is dismissed without a
hearing pursuant to Chapter 14 because it “has no arguable basis in law,” our review is de
novo. Minix, 162 S.W.3d at 637; Retzlaff v. Tex. Dep’t of Crim. Justice, 94 S.W.3d 650,
653 (Tex. App.—Houston [14th Dist.] 2002, pet. denied). A claim has no arguable basis
in law if it is based on (1) wholly incredible or irrational factual allegations; or (2) an
“„indisputably meritless legal theory.‟” Minix, 162 S.W.3d at 637 (quoting Gill v. Boyd
Distrib. Ctr., 64 S.W.3d 601, 603 (Tex. App.—Texarkana 2001, pet. denied)).
2
In “Plaintiff‟s Original Petition,” Burnett complained “of and about David Sharp,
Defendant, alleging legal malpractice . . . .” This pleading included headings entitled
“Parties and Service,” “Discovery Control Plan,” “Jury Demand,” “Jurisdiction and
Venue,” “Facts,” and “Prayer.” The factual and legal bases for Burnett‟s specific causes
of action are alleged in numbered paragraphs in the “Facts” section of his pleading:
6.
In June of 2006, plaintiff retained defendant to represent plaintiff in a
criminal matter. Defendant received $3000.00 from plaintiff for [his] . . .
services.
7.
Defendant made an appearance in court for plaintiff‟s first court
appearance, and reset the cause.
8.
Defendant made four additional court appearances for plaintiff, all of
which defendant reset for the next month.
9.
Defendant was replaced with another attorney. Defendant did not
render any more services for the fee paid to defendant.
10.
Plaintiff called defendant from the jail facility. Defendant‟s
secretary accepted one collect call from plaintiff. Afterwards, the secretary
did not accept [any more] . . . collect calls from plaintiff.
11.
Plaintiff‟s family called defendant on many [occasions] . . . to request
a refund, minus defendant‟s services rendered. Defendant failed to refund
any of plaintiff‟s funds.
12.
Plaintiff‟s family continued to call defendant requesting a refund until
plaintiff served defendant a written request for a return of [his] . . . funds in
September of 2008. Defendant failed to respond nor did defendant refund
plaintiff‟s funds.
13.
Defendant has breached [his] . . . fiduciary duty owed to plaintiff, by
deception and negligence.
In the “Prayer,” Burnett asked that “Defendant be cited to appear and answer . . . .” He
also asked for “compensatory damages in the amount of $10,000.00;” “punitive damages
in the amount of $5,000.00;” and “all relief, in law and in equity, to which Plaintiff [may
be] . . . entitled.”
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The factual allegations quoted above are neither irrational nor wholly incredible.
Burnett alleges the existence of a dispute with his former attorney arising from Burnett‟s
post-termination request for a partial refund of the fee he paid to the attorney during the
representation, and his attorney‟s post-termination failure to do so. Burnett‟s factual
allegations provide no basis for concluding that his suit is frivolous.
Accordingly, the dispositive issue in this appeal is whether the pleaded legal
theories are “„indisputably meritless.‟” Minix, 162 S.W.3d at 637 (quoting Gill, 64
S.W.3d at 603). Answering this question requires us first to identify Burnett‟s pleaded
legal theories. To do so, we must construe a pro se appellant‟s brief and a pro se petition
that was dismissed before service of process was accomplished on the defendant. There is
no appellee‟s brief and no trial court pleading by the defendant to assist us in identifying
the causes of action at issue. Nor are these causes of action identified by name in the
dismissal order. The order states that the trial court “reviewed the pleadings in the above
referenced cause” and concludes as follows: “It appearing that the Plaintiff has failed to
state a cause of action as a matter of law, it is ORDERED that the cause is dismissed with
prejudice to the rights of the Plaintiff to refile the same.”
I.
Determining Which Legal Theories Burnett Asserted Against Sharp
Identifying the legal theories Burnett pleaded is made more difficult by his appellate
brief‟s nonspecific references to a “legal malpractice claim.” Burnett contends on appeal
that he has asserted a non-frivolous claim for “legal malpractice.” He asserts that “[a]ll of
the elements for a legal malpractice claim [were] presented in appellant‟s petition.”
Burnett does not refer in his brief to causes of action for “breach of fiduciary duty,”
“deception,” or “negligence,” which are the labels he used in his petition.
This court has identified “a potential nomenclature problem . . . caused by the fact
that a „legal malpractice claim‟ might be thought of by some as any claim brought by a
client against that client‟s attorney.” Deutsch v. Hoover, Bax & Slovacek, L.L.P., 97
S.W.3d 179, 184 n.1 (Tex. App.—Houston [14th Dist.] 2002, no pet.); see also Beck v. The
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Law Offices of Edwin J. (Ted) Terry, Jr., P.C., 284 S.W.3d 416, 427 n.10 (Tex.
App.—Austin 2009, no pet.). “[W]hen cases refer to „legal malpractice‟ or „a legal
malpractice claim,‟ often they are referring to a negligence claim in which the issue is
whether the attorney exercised that degree of care, skill, and diligence as attorneys of
ordinary skill and knowledge commonly possess and exercise.” Deutsch, 97 S.W.3d at
184 n.1. (citing Goffney v. Rabson, 56 S.W.3d 186, 190 (Tex. App.—Houston [14th Dist.]
2001, pet. denied)); see also Duerr v. Brown, 262 S.W.3d 63, 69-70 (Tex. App.—Houston
[14th Dist.] 2008, no pet.).
Taking this potential nomenclature problem into consideration, the proper approach
on appeal is to address the legal viability of Burnett‟s “legal malpractice” claim under
Chapter 14 by examining it in light of the specific “breach of fiduciary duty,” “deception,”
and “negligence” labels he expressly invoked in his petition to describe his causes of action
against Sharp.
II.
Determining the Disposition of Burnett’s Legal Theories
A. Conversion and Money Had and Received
Burnett sued Sharp for “legal malpractice” based on an allegation that Sharp “has
breached [his] . . . fiduciary duty owed to plaintiff, by deception and negligence.” This
allegation does not assert claims for conversion or money had and received.
Section II.B. of the plurality opinion explains a broad interpretation of Burnett‟s
allegation on grounds that Sharp did not file special exceptions to the original petition. In
so doing, the plurality opinion relies on inapposite case law arising outside the Chapter 14
context. See London v. London, 192 S.W.3d 6, 13 (Tex. App.—Houston [14th Dist.]
2005, pet. denied) (citing Boyles v. Kerr, 855 S.W.2d 593, 600-01 (Tex. 1993)). This
explanation does not withstand scrutiny because Sharp could not be expected to file special
exceptions to a petition that was dismissed under Chapter 14 before it was served on him.
Moreover, Sharp would not have been required to file special exceptions even if Burnett‟s
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petition had been served on him. The absence of special exceptions has no bearing on
whether Burnett asserted legally viable claims under Chapter 14.
The erroneous
incorporation of special exception standards into the Chapter 14 analysis threatens to sow
confusion.
Chapter 14 operates according to its own distinct procedures. “Because a trial
court is authorized to dismiss a claim before service of process, i.e., before the defendant
has filed an answer, we find the court has continuing authority to dismiss a cause of action
even where the defendant files no answer.” McCollum v. Mt. Ararat Baptist Church, Inc.,
980 S.W.2d 535, 537 (Tex. App.—Houston [14th Dist.] 1998, no pet.) (original emphasis).
“In fact, the applicability of chapter fourteen is not contingent on the defendant‟s
satisfaction of any procedural rule.” Id. (original emphasis). “This is consistent with the
purpose of chapter fourteen which is „to control the flood of frivolous lawsuits being filed
in the courts of this State by prison inmates, consuming valuable judicial resources with
little offsetting benefit.‟” Id. (quoting Hickson v. Moya, 926 S.W.2d 397, 399 (Tex.
App.—Waco 1996, no pet)).
This reasoning has been applied to reject contentions that special exceptions are
required before dismissal under Chapter 14. See Hughes v. Massey, 65 S.W.3d 743, 745
(Tex. App.—Beaumont 2001, no pet.) (Special exceptions are not required before
dismissal of inmate‟s in forma pauperis action under Chapter 14; “the inmate has no right
to notice of a motion to dismiss or to an opportunity to amend.”); see also Bonds v.
Rodriguez, No. 04-02-00156-CV, 2003 WL 141043, at *3 (Tex. App.—San Antonio Jan.
22, 2003, pet. denied) (mem. op.) (Special exceptions are not required before dismissal
under Chapter 14; “[h]ad the Legislature intended to impose such a requirement on
defendants in a suit subject to chapter 14, it would have done so. In fact, the Legislature
indicated otherwise by permitting the trial court to dismiss a suit as frivolous even before
process is served.”); Thomas v. Bush, No. 07-99-0302-CV, 2000 WL 21272, at *3 (Tex.
App.—Amarillo 2000 January 13, 2000, no pet.) (per curiam) (not designated for
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publication) (“Because a trial court is authorized to dismiss a claim before service of
process, i.e., before the defendant has even filed an answer, we find that the court‟s
authority to dismiss a cause of action does not depend upon a defendant specially excepting
to the petition) (not designated for publication).
Chapter 14 allows dismissal under circumstances in which dismissal would not be
permitted in other contexts. Cf. Fort Bend County v. Wilson, 825 S.W.2d 251, 253 (Tex.
App.—Houston [14th Dist.] 1992, no writ) (“Although Rule 12(b)(6) of the Federal Rules
of Civil Procedure provides for a motion to dismiss for failure to state a claim upon which
relief can be granted, the Texas Rules of Civil Procedure do not contain any analogous
provision. . . . Under the Texas Rules of Civil Procedure, a special exception is the
appropriate vehicle for urging that the plaintiff has failed to plead a cause of action, and the
pleader must be given, as a matter of right, an opportunity to amend the pleading.”) (citing
Centennial Ins. v. Commercial Union Ins., 803 S.W.2d 479, 482 (Tex. App.—Houston
[14th Dist.] 1991, no writ), and Moseley v. Hernandez, 797 S.W.2d 240, 242 (Tex.
App.—Corpus Christi 1990, no writ)). Because a defendant need not be served and need
not file special exceptions before dismissal under Chapter 14 is appropriate, the absence of
special exceptions cannot properly be relied upon to explain an expansive interpretation of
the allegations made in an inmate‟s in forma pauperis action. We should not mix apples
and oranges.
Burnett did not plead causes of action for conversion or money had and received
when he sued Sharp for “legal malpractice” based on an allegation that Sharp “breached
[his] . . . fiduciary duty owed to plaintiff, by deception and negligence.” The absence of
special exceptions does not transform Burnett‟s narrow allegation into a claim for
conversion or money had and received. Therefore, this court errs when it concludes that
the trial court erred under Chapter 14 by dismissing causes of action for conversion and
money had and received that Burnett did not plead.
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B. Breach of Fiduciary Duty
A legally viable claim for breach of fiduciary duty requires the existence of a
fiduciary relationship between Burnett and Sharp. See, e.g., Trousdale v. Henry, 261
S.W.3d 221, 239 (Tex. App.—Houston [14th Dist.] 2008, pet. denied).
Such a
relationship existed while Sharp represented Burnett. See Duerr, 262 S.W.3d at 69. The
attorney-client relationship ended upon Burnett‟s termination of Sharp‟s representation.
See Stephenson v. LeBoeuf, 16 S.W.3d 829, 836 (Tex. App.—Houston [14th Dist.] 2000,
pet. denied). Under these circumstances, Burnett cannot rely upon a claim for breach of
fiduciary duty to address a post-representation dispute with his former attorney that is
based wholly on conduct alleged to have occurred after the representation ended.
The circumstances here parallel Stephenson, 16 S.W.3d at 836, in which this court
rejected a breach of fiduciary duty claim in connection with a dispute over certain
escrowed sums that arose in 1992 between attorney Stephenson and his former client
LeBoeuf. “Stephenson argues his representation of LeBoeuf in her divorce could not give
rise to a fiduciary duty with respect to the escrow account because that representation
terminated upon her divorce in 1983.” Id. “We agree.” Id. “The attorney-client
relationship is based [on] a contractual relationship in which the attorney agrees to render
professional services for the client.” Id. “In the absence of an agreement to the contrary,
an attorney-client relationship generally terminates upon the completion of the purpose of
the employment.” Id. This court concluded that the terminated representation provided
no basis for a breach of fiduciary duty claim by LeBoeuf predicated entirely on
Stephenson‟s conduct after the representation had ended. Id.
Just as there was no attorney-client relationship in existence when Stephenson
committed the conduct of which LeBoeuf complained, here too there was no
attorney-client relationship in existence when Sharp is alleged to have committed the
conduct of which Burnett complains. Therefore, Burnett‟s allegation does not present a
legally viable claim for breach of fiduciary duty. See id.
8
Section II.C.1. of the plurality opinion relies on Avila v. Havana Painting Co., 761
S.W.2d 398, 399-400 (Tex. App.—Houston [14th Dist.] 1988, writ denied), for the
proposition that “[a] lawyer who refuses to pay or deliver funds belonging to his former
client upon termination of the representation has breached a fiduciary duty owed to the
former client.” See ante, at 8. This reliance on Avila is misplaced.
The client hired attorney Avila to collect past-due accounts and paid him a fee to do
so.
Avila, 761 S.W.2d at 399.
During the representation, Avila collected $8,755
belonging to the client but refused to tender that sum to the client and demanded payment
of an additional fee. Id. The client then sued Avila, alleging that he “breached his
fiduciary duty to his client, Havana, and . . . converted funds which belonged to Havana.”
Id. at 399-400. The trial court rendered judgment in the client‟s favor following a bench
trial, and Avila appealed. Id.
This court affirmed. Id. at 400. “At trial, Havana presented evidence that Avila
received funds from Woodland Oaks Apartments which Havana was entitled to receive
and that Avila refused to deliver those funds to Havana until Havana sued Avila and
requested an injunction to compel Avila to release the funds.”
Id.
“Havana also
presented evidence that it was necessary to hire an attorney to bring suit against Avila to
collect the money to which Havana was entitled.” Id. This court held that sufficient
evidence established Avila‟s breach of his fiduciary duty to the client. Id.
Avila addresses an attorney‟s conduct during the representation that breached a
fiduciary obligation owed during the representation in connection with a fee dispute that
arose during the representation and then continued after the representation ended. Id.
Contrary to the plurality opinion‟s conclusion, Avila does not establish that a breach of
fiduciary duty claim is available to address a post-representation dispute between an
attorney and a former client that is based wholly on attorney conduct occurring after the
representation has ended. Therefore, Avila does not control the resolution of Burnett‟s
appeal. Stephenson does.
9
The plurality opinion cannot bolster its position by asserting that Sharp had a “duty”
to refund to Burnett any unearned part of the retainer upon termination of his
representation of Burnett. See ante, at 9-10 (citing Tex. Disciplinary R. Prof‟l Conduct
1.15(d), reprinted in Tex. Gov‟t. Code Ann., tit. 2, subtit. G, app. A (Vernon 2005) (Tex.
State Bar R. art. X, § 9)). No additional clarity is provided by discussion of a free-floating
“duty” that exists only in the abstract, untethered to a specific cause of action. In any
event, this assertion does not resolve the fiduciary duty question because “[t]hese rules do
not undertake to define standards of civil liability of lawyers for professional conduct.”
Tex. Disciplinary R. Prof‟l Conduct Preamble: Scope ¶ 15, reprinted in Tex. Gov‟t. Code
Ann., tit. 2, subtit. G, app. A (Tex. State Bar R. art. X, § 9). “Violation of a rule does not
give rise to a cause of action nor does it create any presumption that a legal duty to a client
has been breached.”
Id.
“Accordingly, nothing in the rules should be deemed to
augment any substantive legal duty of lawyers or the extra-disciplinary consequences of
violating such a duty.” Id.
The plurality opinion‟s approach would effect a significant change in this court‟s
case law. Left unaddressed are the potential consequences of expanding far-reaching
fiduciary obligations to encompass disputes between an attorney and a former client that
are predicated entirely on attorney conduct occurring after the representation has ended.
Because Avila focuses on a different situation, that decision also does not address the
existence, duration, scope and consequences of a fiduciary duty that applies to a dispute
based wholly on an attorney‟s post-representation conduct.
We should follow Stephenson and affirm dismissal of Burnett‟s claim for breach of
fiduciary duty.
C. Negligence
A “legal malpractice” claim predicated on professional negligence focuses on
whether an attorney represented a client with the requisite level of skill. Duerr, 262
S.W.3d at 70. “If the gist of a client‟s complaint is that the attorney did not exercise that
10
degree of care, skill, or diligence as attorneys of ordinary skill and knowledge commonly
possess, then that complaint should be pursued as a negligence claim, rather than some
other claim.” Deutsch, 97 S.W.3d at 189.
Burnett‟s allegations do not support a legally viable claim against Sharp predicated
on professional negligence. Burnett contends that Sharp failed to respond after Burnett
replaced him with another attorney and then requested a partial refund of Sharp‟s fee.
Burnett does not challenge the quality of Sharp‟s professional activity while he represented
Burnett, and he does not contend that Sharp failed to exercise the degree of care, skill, or
diligence commonly possessed by attorneys of ordinary skill. Therefore, Burnett‟s “legal
malpractice” claim is based on an indisputably meritless legal theory insofar as he asserts a
claim for professional negligence arising from a post-termination dispute over a partial
refund of the portion of Sharp‟s fee that, according to Burnett, Sharp did not earn before
being terminated. Cf. Duerr, 262 S.W.3d at 70 (professional negligence claims were
predicated on allegations that attorneys mishandled filing of client‟s requests for additional
benefits pursuant to class settlement).
D. “Deception”
It is not clear whether Burnett‟s pleaded claim for “deception” refers to a statutory
claim under the Texas Deceptive Trade Practices Act (“DTPA”) or to common law fraud.
Burnett fails to assert a legally viable claim for “deception” under either theory.
Burnett cannot assert a legally viable statutory cause of action for “deception”
against Sharp under the circumstances alleged because the DTPA does not apply to “a
claim for damages based on the rendering of a 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).
Burnett has not identified
circumstances that would invoke an exception to this exemption.1 Cf. Latham v. Castillo,
Section 17.49(c)‟s exemption does not apply to an express misrepresentation of a material fact
that cannot be characterized as advice, judgment, or opinion; a failure to disclose information in violation of
1
11
972 S.W.2d 66, 69 (Tex. 1998) (attorney engaged in “unconscionable action” under
sections 17.50(a)(3) and 17.45(5) by making affirmative misrepresentation to client that he
had filed lawsuit and was actively prosecuting it.).
Similarly, Burnett cannot assert a legally viable common law fraud claim absent
circumstances in which Sharp made affirmative misrepresentations or failed to disclose
information when there was a duty to disclose it.
See, e.g., Johnson v. Brewer &
Prichard, P.C., 73 S.W.3d 193, 211 n.45 (Tex. 2002) (fraud based on affirmative
misrepresentation); Bradford v. Vento, 48 S.W.3d 749, 755 (Tex. 2001) (“As a general
rule, a failure to disclose information does not constitute fraud unless there is a duty to
disclose the information.”). No such circumstances are described here.
III.
Determining Whether Dismissal Should be With Prejudice
Burnett contends that the trial court erred in dismissing his claims “with prejudice.”
Dismissal with prejudice constitutes an adjudication on the merits and operates as if the
case had been fully tried and decided. Hickman, 35 S.W.3d at 124. Orders dismissing
cases with prejudice have full res judicata and collateral estoppel effect, barring
subsequent litigation of the same causes of action or issues between the same parties. Id.
Dismissal with prejudice is proper under Chapter 14 when an inmate‟s failure to comply
with statutory filing requirements cannot be remedied; otherwise, dismissal should be
without prejudice. See id.
Although Burnett‟s allegations do not comport with his stated causes of action, I
cannot say that Burnett‟s failure to comply with Chapter 14‟s requirements is beyond
remedy given the gist of his factual allegations. Therefore, the proper disposition in this
case is dismissal without prejudice. See Hickman, 35 S.W.3d at 124.
section 17.46(b)(24); an unconscionable action or course of action that cannot be characterized as advice,
judgment, or opinion; breach of an express warranty that cannot be characterized as advice, judgment, or
opinion; or a violation of section 17.46(b)(26), which prohibits sales of annuity contracts in certain
circumstances. See Tex. Bus. & Com. Code Ann. § 17.49(c)(1)-(5).
12
Conclusion
The trial court‟s April 14, 2009 order dismissing Burnett‟s suit with prejudice
should be modified to state that Burnett‟s suit is dismissed without prejudice.
As
modified, the April 14, 2009 dismissal order should be affirmed. Therefore, I concur in
the court‟s judgment in part and dissent in part.
/s/
William J. Boyce
Justice
Panel consists of Justices Frost, Boyce, and Sullivan. (Frost, J., majority) (Sullivan, J.,
concurring without opinion).
13
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