Peeler v. Hughes & Luce

909 S.W.2d 494, 1995 WL 453259
CourtTexas Supreme Court
DecidedOctober 27, 1995
Docket94-0041
StatusPublished
Cited by340 cases

This text of 909 S.W.2d 494 (Peeler v. Hughes & Luce) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Peeler v. Hughes & Luce, 909 S.W.2d 494, 1995 WL 453259 (Tex. 1995).

Opinions

ENOCH, Justice,

delivered the opinion of the Court,

in which HECHT, CORNYN and OWEN, Justices, join.

Carol Peeler committed a federal crime. She now sues her attorney because she was indicted, convicted, and punished for that crime. We are asked to decide whether Texas law permits her to do so. The public policy of this State dictates that Peeler’s own conduct is the sole cause of her indictment and conviction. Consequently, without first establishing that she has been exonerated by direct appeal, post-conviction relief, or otherwise, Peeler cannot sue her attorney. The trial court so held, the court of appeals so held, and we so hold. The judgment of the court of appeals is affirmed. 868 S.W.2d 823.

I

Carol Peeler was an officer of both Hill-crest Equities, Inc. and its wholly-owned subsidiary Hillerest Securities Corp., Inc. (collectively, “Hillcrest”), a corporation trading in government securities. She and other indi[496]*496viduals came under federal criminal investigation by the United States Internal Revenue Service because they were suspected of engineering illegal tax write-offs for wealthy investors. Peeler hired Darrell C. Jordan, a partner with Hughes & Luce, L.L.P., to represent her. She paid Hughes & Luce a $250,000 non-refundable retainer fee and further agreed to pay any hourly fees exceeding that amount.

After nearly four years of investigation and negotiation, a federal grand jury indicted Peeler on twenty-one counts. That grand jury also indicted her husband, and the other Hillcrest principals on various charges. A deal was struck between Peeler and the United States. Peeler signed a plea agreement admitting her guilt to count eighteen— “aiding and assisting the filing of a false and fraudulent U.S. Partnership Return of Income for Byrd Investments.” See 26 U.S.C. § 7206(2). She also appeared before the federal judge, admitting her guilt and further testifying that her admission was freely and voluntarily given. In exchange for this, the United States dropped the balance of the charges against her, dismissed all charges against her husband, and recommended a relatively short prison sentence. She was sentenced to a $100,000 fine, $150,000 in restitution, and five years of probation in lieu of incarceration.

II

This case comes to us in the posture of a summary judgment granted in favor of Jordan and Hughes & Luce. Many of the underlying facts in this case are not in dispute. Where they are, it is Peeler’s summary judgment proof that we must accept as true. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985).

Peeler complains that prior to the time she pled guilty, Jordan failed to tell her that the United States Attorney had offered her absolute transactional immunity.1 In other words, the United States Attorney had offered to not prosecute Peeler for her crime, if she would become a witness and testify against her colleagues. Peeler learned about this offer from a journalist three days after pleading guilty. She sued Jordan and Hughes & Luce for violations of the Texas Deceptive Trade Practices — Consumer Protection Act, Tex.Bus. & Com.Code §§ 17.41-17.63, and for legal malpractice, breach of contract, and breach of warranty.2

Jordan and Hughes & Luce moved for summary judgment on Peeler’s claims. Among other grounds, Jordan and Hughes & Luce urged the trial court to grant their motion for summary judgment because Peeler’s own conduct was the sole proximate or producing cause of her damages, and she did not seek to withdraw her plea or set aside her conviction. On these grounds, the trial court rendered summary judgment with respect to all of Peeler’s causes of action. The court of appeals affirmed. 868 S.W.2d at 831. We agree.

Ill

Generally, to recover on a claim of legal malpractice, a plaintiff must prove that (1) the attorney owed the plaintiff a duty, (2) the attorney breached that duty, (3) the breach proximately caused the plaintiffs injuries, and (4) damages occurred. See Cosgrove v. Grimes, 774 S.W.2d 662, 665 (Tex.1989). In the context of a criminal matter, [497]*497we have not addressed whether the client’s criminal conduct is, as a matter of law, the sole proximate or producing cause of the client’s eventual conviction and damages, such that a legal malpractice claim may not be brought absent a showing that the plaintiff has been exonerated from the criminal conviction, either by direct appeal, post-conviction relief, or otherwise. We note that one Texas appellate court has held that the same elements apply to all legal malpractice cases, civil as well as criminal. Tijerina v. Wennermark, 700 S.W.2d 342, 344 (Tex.App.—San Antonio 1985, no writ). Another court required an appellant to show that the attorney’s inaction was a proximate cause of some injury, but it did not confront the issue of whether a person who admits guilt would, as a matter of law, be able to prove such causation. Wright v. Lewis, 777 S.W.2d 520, 522 (Tex.App.—Corpus Christi 1989, writ denied). And in one case it was noted that the criminal defendant did not allege his innocence, but the court predicated its decision that the legal malpractice was not actionable upon the Texas Court of Criminal Appeals’ holding that the defense lawyer had not rendered ineffective assistance. Garcia v. Ray, 556 S.W.2d 870, 872 (Tex.Civ.App.—Corpus Christi 1977, writ dism’d). None of these eases are helpful. Like the court of appeals below, however, nearly every court that has addressed the question of whether a convict may sue his or her attorney holds that, for reasons of public policy, the criminal conduct is the only cause of any injury suffered as a result of conviction. See, e.g., Walker v. Kruse, 484 F.2d 802, 804 (7th Cir.1973) (applying Illinois law); Orr v. Black & Furci, P.A., 876 F.Supp. 1270, 1276 (M.D.Fla.1995) (applying Florida law); Shaw v. Alaska, 861 P.2d 566, 572 (Alaska 1993); Weiner v. Mitchell, Silberberg & Knupp, 114 Cal.App.3d 39, 170 Cal.Rptr. 533, 538 (1981); Glenn v. Aiken, 409 Mass. 699, 569 N.E.2d 783, 788 (1991); Morgano v. Smith, 110 Nev. 1025, 879 P.2d 735, 737-38 (1994); Carmel v. Lunney, 70 N.Y.2d 169, 518 N.Y.S.2d 605, 607, 511 N.E.2d 1126, 1128 (1987); Bailey v. Tucker, 533 Pa. 237, 621 A.2d 108, 114-15 (1993); see also Stevens v. Bispham, 316 Or. 221, 851 P.2d 556, 566 (1993) (holding that a criminal defendant cannot satisfy the damages element of a professional negligence claim against his former attorney unless he has been exonerated).

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Bluebook (online)
909 S.W.2d 494, 1995 WL 453259, Counsel Stack Legal Research, https://law.counselstack.com/opinion/peeler-v-hughes-luce-tex-1995.