Albert Lee Giddens, a Professional Legal Corporation v. Victoria Hale Risinger

Opinion

Opinion issued March 8, 2012

In The

Court of Appeals

For The

First District of Texas

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NO. 01-11-00242-CV

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ALBERT LEE GIDDENS, A PROFESSIONAL LEGAL CORPORATION, Appellant

V.

VICTORIA HALE RISINGER, Appellee

On Appeal from the 11th District Court

Harris County, Texas

Trial Court Cause No. 2010-49110

MEMORANDUM OPINION

          We deny appellant’s motion for rehearing.  See Tex. R. App. P. 49.3.  We withdraw our January 26, 2012 opinion, substitute this opinion in its stead, and vacate our January 26, 2012 judgment.

Appellant, Albert Lee Giddens, A Professional Legal Corporation, challenges the trial court’s rendition of summary judgment in favor of appellee, Victoria Hale Risinger, in Giddens’s suit against Risinger for breach of contract.  In three issues, Giddens contends that the trial court erred in granting Risinger summary judgment, Giddens raised material fact issues on Risinger’s affirmative defenses, and Risinger did not specifically plead her affirmative defenses.       

          We affirm.

Background

          Risinger’s husband was killed in an automobile collision in 2002.  Shortly thereafter, Risinger retained Giddens to represent her and her two minor children in a wrongful-death lawsuit against the driver who caused the collision.  On September 8, 2004, the wrongful-death lawsuit was settled for $1,350,000, with $220,000 of that paid to Giddens for attorney’s fees.  At the Minor Settlement Conference, Risinger testified that she had originally agreed to pay Giddens 40% of any recovery but Giddens had agreed to reduce his fee to approximately 16.2%, or $220,000. 

          On September 8, 2006, Risinger, alleging that Giddens had committed legal malpractice in the wrongful-death lawsuit, filed a separate lawsuit against Giddens, individually, his former law firm, Smyrl & Giddens, and his former law partner.  Risinger contended that Giddens had convinced her that she needed an attorney to represent her in a wrongful-death lawsuit against the insurance company for the negligent driver, Giddens told her that if she did not hire her own lawyer “the court would appoint one anyway,” and Giddens represented other claimants in the wrongful-death lawsuit who had conflicting interests.  Risinger sought to recover as her damages the attorney’s fees that she had paid to Giddens in the initial lawsuit.  Giddens did not file any counterclaims.  On February 22, 2010, Risinger submitted an Unopposed Motion to Dismiss with Prejudice her legal-malpractice lawsuit, which was signed by both her and Giddens’s attorneys.  On March 1, 2010, the trial court dismissed the legal-malpractice lawsuit with prejudice.

          Approximately five months later, after the parties had entered into the agreed order to dismiss Risinger’s malpractice lawsuit, Giddens, on August 9, 2010, filed the underlying breach-of-contract lawsuit against Risinger.  Giddens alleged that he and Risinger had renegotiated the percentage of attorney’s fees that he was to receive from the wrongful-death lawsuit and Risinger breached this agreement by subsequently bringing her legal-malpractice lawsuit.  Giddens sought as his damages the “lost profits” from his original contingent-fee contract, which Giddens characterized as the “difference between the original agreed upon attorney’s fees and the reduced attorney’s fees.” 

Risinger filed an answer generally denying Giddens’s claim.  Risinger then filed a summary-judgment motion, contending that Giddens’s breach-of-contract claim failed as a matter of law because Giddens had agreed to accept the reduced amount of fees as memorialized by a written agreement, Giddens’s claim was barred by the statute of limitations, and Giddens’s claim was barred by res judicata.  In support of her motion, Risinger attached to it a copy of the transcript from the Minor Settlement Conference establishing that Giddens had agreed to the reduced fees.  She also attached to her motion her affidavit in which she testified that her husband was a passenger in a Jeep that was being driven by his friend at the time of the collision, the Jeep rolled over when the driver attempted a dangerous maneuver, her husband was killed instantly, the driver admitted fault within hours of the collision, and the driver agreed to admit this to his insurance company.  She explained that Giddens had contacted her shortly after the collision, Risinger told Giddens that she intended to negotiate directly with the driver’s insurer, and she signed a contract with Giddens based upon him telling her that she “had to hire counsel.”  Risinger further testified that, unbeknownst to her, Giddens also represented other wrongful-death claimants in regard to the collision.  She subsequently filed her legal-malpractice lawsuit against Giddens, Giddens did not file any counterclaims, and she agreed to settle the legal-malpractice lawsuit.  Risinger also attached to her motion a copy of the petition that she had filed in the legal-malpractice lawsuit and the motion to dismiss.   In support of her res judicata argument, Risinger asserted that Giddens’s breach-of-contract claim “arose from the same transaction” and “operative facts” giving rise to Risinger’s legal-malpractice claim, Giddens’s claim was a compulsory counterclaim, and the claims should have been tried concurrently. 

          In his response, Giddens asserted that Risinger breached the contract when she became “unhappy with the renegotiated contract” and filed the legal-malpractice lawsuit.  Giddens argued that res judicata did not bar his breach-of-contract claim because “Albert Lee Giddens, a Professional Legal Corporation” was not a party in Risinger’s legal-malpractice lawsuit.

The trial court granted Risinger’s 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 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.  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. 1985).  Every reasonable inference must be indulged in favor of the non-movant and any doubts must be resolved in his favor.  Id. at 549.

Res Judicata

          In his second and third issues, Giddens argues that the trial court erred in granting summary judgment on the ground of res judicata because “Albert Lee Giddens, A Professional Legal Corporation” was not a party to the legal-malpractice lawsuit brought by Risinger and she did not plead the affirmative defense of res judicata in her answer. 

Res judicata is an affirmative defense that bars relitigation of claims that have been finally adjudicated or that arise out of the same subject matter and that could have been litigated in the prior action.   Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996); Tex. R. Civ. P. 94.  Texas applies the transactional approach to res judicata, “which requires claims arising out of the same subject matter to be litigated in a single lawsuit.”  Hallco Tex., Inc. v. McMullen County, 221 S.W.3d 50, 58 (Tex. 2006); see also Gracia v. RC Cola–7–Up Bottling Co., 667 S.W.2d 517, 519 (Tex. 1984) (“The judgment in the first suit precludes a second action by the parties and their privies on matters actually litigated and on causes of action or defenses arising out of the same subject matter that might have been litigated in the first suit.”).  The doctrine of res judicata “serves vital public interests” by promoting the finality of judgments and prevents needless, repetitive litigation.  Hallco Texas, Inc., 221 S.W.3d at 58.

The transactional approach mandates that a defendant bring as a counterclaim any claim arising out of the transaction or occurrence that is the subject matter of the opposing party’s suit.   State and County Mut. Fire Ins. Co. v. Miller, 52 S.W.3d 693, 696 (Tex. 2001).   A counterclaim can be characterized as compulsory if: (1) it is within the jurisdiction of the court; (2) it is not at the time of filing the answer the subject of a pending action; (3) the claim is mature and owned by the defendant at the time of filing the answer; (4) it arose out of the same transaction or occurrence that is the subject matter of the opposing party’s claim; (5) it is against an opposing party in the same capacity; and (6) it does not require the presence of third parties over whom the court cannot acquire jurisdiction.  Ingersoll-Rand Co. v. Valero Energy Corp., 997 S.W.2d 203, 207 (Tex. 1999); Tex. R. Civ. P. 97(a).  A claim having all of these elements must be asserted in the initial action and cannot be asserted in later actions.  Id. 

A party relying on res judicata must prove (1) a prior final determination on the merits by a court of competent jurisdiction; (2) identity of parties or those in privity with them; and (3) a second action based on the same claims as were or could have been raised in the first action.  Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010).  Parties can be in privity in at least three ways: (1) they can control an action even if they are not parties to it; (2) their interests can be represented by a party to the action; or (3) they can be successors in interest, deriving their claims through a party to the prior action.  Amstadt, 919 S.W.2d at 652 (citing Getty Oil Co. v. Insurance Co. of N. Am., 845 S.W.2d 794, 800 (Tex. 1992)). 

          Giddens challenges the application of Risinger’s affirmative defense of res judicata only by asserting that the there is no identity of parties between the defendant in Risinger’s legal-malpractice lawsuit, which was against Giddens, individually, and the plaintiff in the breach-of-contract lawsuit, i.e., “Albert Lee Giddens, A Professional Legal Corporation.”  Giddens asserts that the compulsory counterclaim rule does not apply because he was not “already in the lawsuit.” 

Although the record is not entirely clear on Giddens’s reasons for bringing this breach-of-contract lawsuit against Risinger in the name of “Albert Lee Giddens, a Professional Legal Corporation,”[1] Giddens brought his suit within five months from the date that he had agreed to the dismissal of Risinger’s legal-malpractice lawsuit against him.  The agreed motion to dismiss the lawsuit identified Giddens as the defendant.  We conclude that the summary-judgment record establishes that there is an identity of parties in both Risinger’s legal-malpractice lawsuit and Giddens’s breach-of-contract lawsuit.  See Amstadt, 919 S.W.2d at 652 (“Privity exists if the parties share an identity of interests in the basic legal right that is the subject of litigation.”).  The original attorney contract was made between Risinger and “Albert Lee Giddens, Attorney at Law.”  Risinger brought her legal-malpractice lawsuit against Giddens, and the record demonstrates that Giddens’s interests were represented in the prior action.  Accordingly, we hold that the trial court did not err in granting Risinger’s summary-judgment motion on the ground of res judicata.

In regard to Giddens’s complaint that Risinger did not plead her affirmative defenses in her answer, Giddens did not make this objection in the trial court, and he has waived his complaint regarding Risinger’s pleading defect.  See Roark v. Stallworth Oil and Gas, Inc., 813 S.W.2d 492, 495 (Tex. 1991) (“If the non-movant does not object to a variance between the motion for summary judgment and the movant’s pleadings, it would advance no compelling interest of the parties or of our legal system to reverse a summary judgment simply because of a pleading defect.”). 

We overrule Giddens’s second and third issues.  Accordingly, we need not reach Giddens’s first issue, in which he argues that there are fact issues on the essential elements of his breach-of-contract claim.

Conclusion

          We affirm the judgment of the trial court. 

                                                                    Terry Jennings

                                                                   Justice

Panel consists of Justices Jennings, Sharp, and Brown.

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[1]           “Albert Lee Giddens, a Professional Legal Corporation” is, presumably, the name of the entity under which Giddens currently practices law. 

In his motion for rehearing, Giddens asserts that “Albert Lee Giddens, A Professional Legal Corporation” was established on October 18, 1979.  He has attached to his motion a certificate of incorporation, which is not included in the appellate record, that states that “Albert Lee Giddens, a Professional Legal Corporation” was incorporated in 1979.  Based upon this certificate, Giddens challenges our holding that there is an “identity of parties in both Risinger’s legal-malpractice lawsuit and Giddens’s breach-of-contract lawsuit.” 

However, the summary-judgment record demonstrates that Giddens represented Risinger in the wrongful-death lawsuit.  The original attorney contract was made between Risinger and “Albert Lee Giddens, Attorney at Law.” Giddens signed the petition as Risinger’s attorney, and his signature block indicates that he represented Risinger while working as an attorney at Smyrl & Giddens, LLP.  Risinger brought her legal-malpractice lawsuit against Albert Lee Giddens, Smyrl & Giddens, LLP, and R. Michael Smyrl, who was apparently Giddens’s former law partner at the law firm of Smyrl & Giddens, LLP. 

Risinger included in the summary-judgment record an affidavit in which she testified that “Albert Lee Giddens” contacted her shortly after her husband was killed in the automobile collision, she signed a contract with Giddens based upon his representations that she had to retain an attorney for the matter, and Giddens served as her attorney at a 2004 hearing in which the wrongful-death lawsuit was settled.  Risinger also testified that, in 2006, she sued Giddens for legal malpractice arising from his representation of her in the wrongful-death lawsuit, Giddens did not file any counterclaims, she and Giddens agreed to settle this lawsuit, the parties’ settlement was completed on February 22, 2010, and the legal-malpractice lawsuit was dismissed with prejudice.  It is undisputed that, approximately five months later, “Albert Lee Giddens, A Professional Legal Corporation,” brought the underlying lawsuit against Risinger.  It is also undisputed that the breach-of-contract claims brought by Giddens in the underlying lawsuit necessarily arose from Giddens’s representation of Risinger in the wrongful-death lawsuit and Risinger’s subsequent legal-malpractice lawsuit against Giddens, which the parties settled and the trial court dismissed with prejudice.

There is no mention in the original attorney agreement, the documents from the wrongful-death lawsuit, the documents from the legal-malpractice lawsuit, or Risinger’s affidavit of a legal corporate entity identified as “Albert Lee Giddens, A Professional Legal Corporation.”  There is also nothing in the record to contradict Risinger’s affidavit testimony or the other documentary evidence demonstrating that Risinger retained, and was represented by, Giddens in the wrongful-death lawsuit and Risinger and Giddens settled Risinger’s legal-malpractice lawsuit against him in late February 2010.  There is also no dispute that Giddens made no attempt to file against Risinger, in her legal-malpractice lawsuit, the underlying breach-of-contract claims, which Giddens subsequently attempted to assert in the instant lawsuit filed by “Albert Lee Giddens, A Professional Legal Corporation,” just five months later.  Finally, the record before us demonstrates that, whatever the factual basis of his breach-of-contract claims, Giddens could have asserted any such claims in Risinger’s legal-malpractice lawsuit.

Giddens offers no explanation as to why Risinger is not entitled to the application of the doctrine of res judicata.  He has simply asserted his breach-of-contract claims in the name of a legal corporate entity that was not identified in his original attorney agreement with Risinger, and this agreement necessarily forms the basis of any breach-of-contract claim against Risigner.  Giddens also provides no explanation as to why he would be entitled to bring his claim in the name of a legal corporate entity that was never identified as a party to the dispute in any of the pleadings from the multiple prior lawsuits.  Thus, regardless of when Giddens formed the entity “Albert Lee Giddens, A Professional Legal Corporation,” the summary-judgment record firmly establishes that there is an identity of parties in both Risinger’s legal-malpractice lawsuit and Giddens’s breach-of-contract lawsuit and Giddens’s interests were represented in the prior action.