Murphy v. Gruber

241 S.W.3d 689, 2007 Tex. App. LEXIS 9707, 2007 WL 4341010
CourtCourt of Appeals of Texas
DecidedDecember 13, 2007
Docket05-05-01013-CV
StatusPublished
Cited by104 cases

This text of 241 S.W.3d 689 (Murphy v. Gruber) 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.

Bluebook
Murphy v. Gruber, 241 S.W.3d 689, 2007 Tex. App. LEXIS 9707, 2007 WL 4341010 (Tex. Ct. App. 2007).

Opinion

OPINION

Opinion by

Justice LANG-MIERS.

In this case, we decide whether certain claims pleaded as breach-of-fiduciary-duty and fraud claims are really impermissibly fractured professional negligence 1 claims barred by the two-year statute of limitations. Karen Brock Murphy, Amelia Brock Banner, and Jody Brock Irwin, individually and as co-independent executors of the estate of Doris Berglund Brock and as co-trustees of the Brock Family Trust (the Brocks), appeal the trial court’s summary judgment orders dismissing their breach-of-fiduciary-duty and fraud claims against G. Michael Gruber, William D. Elliott, and Kane, Russell, Coleman & Logan, P.C. (the Lawyers). We affirm.

1. Factual and Procedural Background

Charles D. Howell was a limited partner in VSMI/Blockbuster Ltd. I, a limited partnership formed to own and operate Blockbuster franchises. He sued various defendants for selling the general partnership interests and assets back to the franchiser, Blockbuster Entertainment Corp., without appropriately compensating the limited partners. The Lawyers represented Howell in that lawsuit and obtained a $123 million judgment, consisting of $13 million in actual damages and $110 million in punitive damages.

The Brocks contend here that B. Coleman Renick, another limited partner in VSMI/Blockbuster Ltd. I, was the business partner and trusted confidant of their father, Harry Joe Brock, who was also a limited partner. 2 After Brock’s death, his widow and their children (the Brocks) continued to look to Renick for advice and counsel. Renick became interested in pursuing claims similar to Howell’s and encouraged the Brocks to join the lawsuit. Renick told the Brocks that the Lawyers, specifically Gruber, expressed great confidence in the value of their claims. Gruber also stated that most of the issues had been decided in the Howell case and the next partnership group would have little to do to prove damages. Because the Brocks trusted Renick, they agreed to join the lawsuit. The Brocks looked to Renick to guide them through the lawsuit and allowed him to act as their agent in dealing with the Lawyers. As the case progressed, the Blockbuster defendants filed a counterclaim against Renick. The Law *692 yers negotiated a $7.5 million settlement in the ease, and the trial court entered a final judgment on August 14, 1997 based on the parties’ settlement agreement.

On July 9, 2001, the Brocks sued Renick and the Lawyers for, among other claims, breach of fiduciary duty. 3 The Brocks claimed the Lawyers represented them with divided loyalties, failed to inform them of material facts as soon as a conflict arose, and failed to make a full and fair disclosure of every facet of a proposed settlement of the Blockbuster case. They amended their petition on April 21, 2004, to add a claim for fraud against the Lawyers. The Brocks sought fee forfeiture and imposition of a constructive trust as damages.

The Lawyers moved for summary judgment on the breach-of-fiduciary-duty claim, asserting the Brocks’ claim constituted one claim for legal malpractice and the statute of limitations on that claim had expired. The trial court agreed and granted the Lawyers’ motion on that basis. The Lawyers filed a second motion for summary judgment on the Brocks’ fraud claim, arguing that claim was also barred because it was an impermissible fracturing of the legal malpractice claim, which the court had already concluded was time barred, or, alternatively, because it was first asserted more than four years after the final judgment in the underlying lawsuit. The trial court granted the second motion for summary judgment without stating the basis for its ruling. This appeal followed.

II.Issue Presented

In a single issue, the Brocks contend the trial court erred when it concluded their breach-of-fiduciary-duty and fraud claims are barred by the two-year statute of limitations that applies to negligence claims.

III.Standard of Review

The function of summary judgment is not to deprive a litigant of its right to a full hearing on the merits of any real issue of fact, but to eliminate patently unmerito-rious claims and untenable defenses. Turner v. Church of Jesus Christ of Latter-Day Saints, 18 S.W.3d 877, 885 (Tex.App.-Dallas 2000, pet. denied) (citing Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929, 931 (1952)). Here, the Brocks only challenge whether the trial court properly characterized the claims they labeled breach of fiduciary duty and fraud as negligence claims. 4 Whether allegations against a lawyer, labeled as breach of fiduciary duty, fraud, or some other cause of action, are actually claims for professional negligence or something else is a question of law to be determined by the court. See, e.g., Greathouse v. McConnell, 982 S.W.2d 165, 172 (Tex.App.-Houston [1st Dist.] 1998, pet. denied) (stating court had to decide precise nature of claims alleged before considering grounds asserted in summary judgment motion). Our review of a decision of a question of law is de novo. See Barber v. Colo. Indep. Sch. Dist., 901 S.W.2d 447, 450 (Tex.1995) (issues of law decided de novo).

IV.Applicable Law

A. The Difference Between Negligence, Breach-of-Fiduciary-Duty, and Fraud Claims Against Lawyers

Professional negligence, or the failure to exercise ordinary care, includes *693 giving a client bad legal advice or otherwise improperly representing the client. Newton v. Meade, 143 S.W.3d 571, 574 (Tex.App.-Dallas 2004, no pet.); Greathouse, 982 S.W.2d at 172. For example, 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 preparing, managing, and prosecuting a case. See, e.g., Newton, 143 S.W.3d at 574; Kimleco Petroleum, Inc. v. Morrison & Shelton, 91 S.W.3d 921, 923-24 (Tex.App.-Fort Worth 2002, pet. denied). The statute of limitations on professional negligence claims against lawyers is two years. Parsons v. Turley, 109 S.W.3d 804, 807 (TexApp.-Dallas 2003, pet. denied).

On the other hand, breach of fiduciary duty by a lawyer “involves the ‘integrity and fidelity’ of an attorney and focuses on whether an attorney obtained an improper benefit from representing the client.” Gibson v. Ellis, 126 S.W.3d 324, 330 (Tex.App.-Dallas 2004, no pet.) (citing Kimleco Petroleum, 91 S.W.3d at 923).

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Cite This Page — Counsel Stack

Bluebook (online)
241 S.W.3d 689, 2007 Tex. App. LEXIS 9707, 2007 WL 4341010, Counsel Stack Legal Research, https://law.counselstack.com/opinion/murphy-v-gruber-texapp-2007.