Abercrombie Group, LLC and Abercrombie Holdings, LLC v. Robert Clark Flynn Francis & Clark, LLP And Flynn & Francis, LLP

CourtCourt of Appeals of Texas
DecidedJune 29, 2023
Docket02-22-00399-CV
StatusPublished

This text of Abercrombie Group, LLC and Abercrombie Holdings, LLC v. Robert Clark Flynn Francis & Clark, LLP And Flynn & Francis, LLP (Abercrombie Group, LLC and Abercrombie Holdings, LLC v. Robert Clark Flynn Francis & Clark, LLP And Flynn & Francis, LLP) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Abercrombie Group, LLC and Abercrombie Holdings, LLC v. Robert Clark Flynn Francis & Clark, LLP And Flynn & Francis, LLP, (Tex. Ct. App. 2023).

Opinion

In the Court of Appeals Second Appellate District of Texas at Fort Worth ___________________________ No. 02-22-00399-CV ___________________________

ABERCROMBIE GROUP, LLC AND ABERCROMBIE HOLDINGS, LLC, Appellants

V.

ROBERT CLARK; FLYNN FRANCIS & CLARK, LLP; AND FLYNN & FRANCIS, LLP, Appellees

On Appeal from the 48th District Court Tarrant County, Texas Trial Court No. 048-323585-21

Before Sudderth, C.J.; Birdwell and Womack, JJ. Memorandum Opinion by Justice Womack MEMORANDUM OPINION

I. INTRODUCTION

Appellants Abercrombie Group, LLC and Abercrombie Holdings, LLC1 appeal

the trial court’s order granting Appellees Robert Clark; Flynn Francis & Clark, LLP;

and Flynn & Francis, LLP’s2 (collectively, the lawyers) motion for summary judgment.

In a single issue, Abercrombie complains that the trial court erred by granting

summary judgment in this legal malpractice case involving a promissory note (the

Note) and a real estate development project. We will affirm.

II. BACKGROUND

In 2007, Cary Clarke3 formed Keller Winding Creek, LLC (KWC) for the

purpose of developing approximately twenty acres of land into residential lots (the

Property). In exchange for $400,000, Abercrombie received a 16% membership

interest in KWC.

In 2009, Abercrombie wanted its money back and retained the lawyers to

represent it in litigation against KWC; Founders Development Company, LP

Because Abercrombie Holdings, LLC later transferred the subject promissory 1

note to Abercrombie Group, LLC, we will collectively refer to Appellants as “Abercrombie.” 2 The pleadings alleged that attorney Clark “act[ed] at all times material hereto as an agent or representative of either the law firm of Flynn & Francis, LLP or Flynn, Francis & Clark, LLP.” 3 We will refer to Cary Clarke as “Cary” and Devane Clarke as “Devane” because both are involved in this litigation and share the same surname.

2 (Founders)—which held a 64% membership interest in KWC; The Devane Clarke

Partnership, Limited (Devane Partnership)—which held a 12% membership interest

in KWC; and Cary, individually. The remaining 8% membership interest in KWC was

owned by Petroleum Financing, Incorporated. Cary was the president of Cary Clarke

Homes, Inc., which was the General Partner of both KWC and Founders. Devane

Clarke was Cary’s father.

In an August 2009 “Unanimous Consent & Certificate of Resolution,” the

KWC members agreed that Founders would purchase the interest of Abercrombie

“by way of promissory note with an original principal balance of $400,000.00 with an

annual interest rate in the amount of 15%.” Later that month, Founders as borrower

executed the Note with Abercrombie as lender in the principal amount of $400,000

with an annual interest rate of 15%. The terms of payment were “[o]ne lump sum

payment including principal and all unpaid interest upon completion of the [KWC]

development project.” The Property was not security for the Note. Rather, the Note

reflected that “Security for Payment” was the “[p]ersonal guarantee of Cary Clarke.”

Devane died in 2011. Thereafter, Cary began managing Devane Partnership,

and the Property was transferred from KWC to Devane Partnership on April 8, 2013.

On August 27, 2013, Abercrombie—concerned about getting paid the money

pursuant to the Note—contacted attorney Robert Clark about putting a lien on the

Property. However, Clark advised that, because the Note was not secured by the

Property, Abercrombie should instead “file a Notice of Agreement in the deed

3 records to put potential purchasers on notice.” The Notice was filed in the deed

records in September 2013.

Almost four years later, Abercrombie’s representative sent an email to Clark

stating that Abercrombie was “ready to sue [Cary] or at least start with a very stern

letter.” Ultimately, on November 28, 2017, the lawyers filed suit on behalf of

Abercrombie against KWC, Founders, Devane Partnership, and Cary, individually

(the underlying lawsuit). The lawsuit sought “to reform the [N]ote so that it [would

be currently] due.” According to the pleadings, “It was never the intention of the

parties that the [N]ote would still not be due 8+ years after the [N]ote was signed.”

In addition to the Note reformation, the pleadings sought “imposition of a

constructive trust upon the Winding Creek property or on any sales proceeds from its

sale due to the fraud of Defendants,” or alternatively, actual damages of $400,000 plus

interest. At some point after the underlying lawsuit was filed, Abercrombie secured

the services of attorney Caleb Moore to represent it instead of the lawyers. Moore

settled the underlying lawsuit for the payment of $400,000 to Abercrombie by the

defendants.

In February 2021, Abercrombie filed a legal malpractice lawsuit against the

lawyers. In the lawsuit, Abercrombie alleged,

Previous to the filing of the lawsuit, Defendant Robert Clark had prepared a Memorandum of Agreement made effective August 25, 2009 and acknowledged on September 6 and September 23, 2013, on behalf of Abercrombie Holdings, LLC. The Memorandum of Agreement gave notice of a Promissory Note payable to Abercrombie Holdings, LLC

4 from Founders Development, LP in the principal sum of $400,000 with interest at 15% per annum, dated August 25, 2009 (“the Note”). The Memorandum of Agreement states in part that the property in question (the Keller Winding Creek Development Project) was transferred to The Devane Clarke Partnership, Ltd. on April 8, 2013.

[ ] The Note provided in part that payment would be due in one lump sum upon “completion of the Keller Winding Creek Development Project.” As of the date of the conveyance of the property comprising the Keller Winding Creek Development Project to The Devane Clarke Partnership, Ltd., it was clear that the Keller Winding Creek Development Project would never be completed by Founder’s Development, LP.

Based on these facts, Abercrombie’s pleadings contended that the four-year statute of

limitations for breach of contract on the Note “began to run at the latest on

September 6, 2013, when [Abercrombie] first discovered the conveyance of the

[P]roperty to [Devane Partnership].” Abercrombie alleged that, because the statute of

limitations had expired when the lawyers filed the underlying lawsuit, it was “forced to

settle that case for the best terms possible” even though there was still owing “in

excess of $800,000 in interest on the promissory note which could not be collected.”

Abercrombie’s contention in the legal malpractice lawsuit was that the lawyers

“were negligent in their representation of [Abercrombie] by failing to file suit [on the

Note] within the limitations period.” Abercrombie further alleged that the lawyers

were “independently liable for not maintaining or enforcing policies and procedures

designed to prevent statutes of limitations from running without suit being filed.”

The lawyers answered the lawsuit and later filed their Traditional and No-Evidence

Motions for Summary Judgment. Abercrombie filed a response to the motions for

5 summary judgment. The lawyers replied to the response. After a hearing, the trial

court granted the traditional motion for summary judgment. Abercrombie appeals

from this order.

III. DISCUSSION

In one issue, Abercrombie contends that the trial court erred in granting

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Abercrombie Group, LLC and Abercrombie Holdings, LLC v. Robert Clark Flynn Francis & Clark, LLP And Flynn & Francis, LLP, Counsel Stack Legal Research, https://law.counselstack.com/opinion/abercrombie-group-llc-and-abercrombie-holdings-llc-v-robert-clark-flynn-texapp-2023.