Richard Alan Haase v. Abraham, Watkins, Nichols, Sorrels and Friend, LLP and Randy Sorrells

499 S.W.3d 169, 2016 Tex. App. LEXIS 7530, 2016 WL 3902735
Court of Appeals of Texas·Decided July 14, 2016·No. NO. 14-14-00572-CV·Published·Cited by 17 cases

Opinions

OPINION

Kem Thompson Frost, Chief Justice

The appellant/plaintiff in a professional-negligence action challenges the summary judgment granted in favor of appellees/defendants—a law firm and an individual attorney. The outcome for the law firm turns on whether there is any summary-judgment evidence upon which the trial court could have relied in granting summary judgment. The outcome for the individual attorney turns , on the application of [172] the Hughes tolling rule1 to the attorney’s statute-of-limitations defense. We affirm the summary judgment in favor of the law firm and reverse and remand the summary judgment in favor of the individual attorney.

Factual and Pkocedural Background

On the advice of his patent attorney, appellani/plaintiff Richard Alan Haase retained appellees/defendants attorney Randall Sorrels and the law firm Abrar ham, Watkins, Nichols, Sorrels, Agosto, & Friend, L.L.P. (collectively, the “Abraham Watkins Parties”) as the trial team to litigate complaints Haase asserted individually and on behalf of his company, ClearVa-lue, Inc. against Pearl River Polymers, Inc. and four other entities (collectively the “Pearl River Parties”) in federal court.

The Underlying Suit

Haase and his company filed suit in the United States District Court for the Eastern District of Texas in January 2005 (the “Underlying Suit”), alleging that the Pearl River Parties infringed on a patent and misappropriated trade secrets. Specifically, Haase alleged that the Pearl River Parties’ product line used high molecular weight poly diallyl di-methyl ammonium chloride and high molecular weight poly epichloroh-ydrin di-methyl amine polymers described in patents Haase and ClearValue, Inc. held.

Haase asserted that he asked an expert to test one of these compounds for business purposes unrelated to litigation, but after Haase shared the results with the Abraham Watkins Parties, they labeled the results “attorney-client work product.” As Haase and the Abraham Watkins Parties prepared for trial, conflicts developed. Haase asked the Abraham Watkins Parties to add a fraud claim and another alleged tortfeasor to the litigation. Haase also asked the Abraham Watkins Parties to complete discovery that he alleges they failed to conduct. According to Haase, the Abraham Watkins Parties directed him to make low settlement offers and threatened to withdraw from representation if he did not do so.

The Abraham Watkins Parties withdrew from representation of Haase and his company in the Underlying Suit in June 2006, and Haase retained new litigation counsel a few months later. In the Underlying Suit, the Pearl River Parties requested discovery of any testing Haase had done on the Pearl River Parties’ compound. During trial, which commenced in March 2007, the Pearl River Parties discovered that Haase had failed to disclose in discovery the results of the tests Haase had performed on the compound. The United States District Court imposed a $2.7 million sanction on Haase and struck Haase’s pleadings. In March 2009, the United States Court of Appeals for the Federal Circuit affirmed $121,107 in' sanctions, but reversed the remainder of the sanctions and remanded Haase’s complaint for trial, concluding that his conduct did not warrant the death-penalty sanction.

A new trial commenced in the Underlying Suit in April 2010. The jury found in favor of Haase on his claims of misappropriation of trade secrets and patent infringement, but in a final judgment in November 2010, the trial court set aside the damages findings for the misappropriation claim. Both sides appealed the trial court’s final judgment to the United States Court of Appeals for the Federal Circuit. The appellate court concluded that the Pearl River Parties had not misappropriated a trade secret and that Haase’s patent was invalid. Haase then filed a petition for a [173] writ of certiorari in the Supreme Court of the United States. The high court denied it.

State Court Suit Against the Attorney-Defendants

In March 2011, while Haase’s appeal in the Underlying Suit was in the federal appellate court, Haase filed suit against Abraham, Watkins, Nichols, Sorrels, Agos-to, & Friend, L.L.P. in state court, alleging professional negligence. Haase asserted that the law firm was responsible for conduct that caused him to be sanctioned in the Underlying Suit. Haase also alleged the law firm was liable for negligence based on its failure (1) to join additional tortfeasors and (2) to pursue a claim for fraud against one of the named Pearl River Parties. Haase included claims for negligent misrepresentation and breach of contract.

Abraham, Watkins, Nichols, Sorrels, Agosto, & Friend L.L.P. sought summary judgment on traditional grounds, and the trial court granted the motion. Haase appealed the summary judgment, and this court affirmed as to the claim based on mislabeling, holding that the claim that the law firm’s negligent conduct caused Haase to be sanctioned was barred by the applicable statute of limitations. This court remanded the remaining claims to the trial court.

Following remand, Haase amended his petition and added Sorrels as a defendant. In his live pleading, Haase asserted a breach-of-fiduciary-duty claim against Sorrels based on the attorney’s alleged actions in (1) intentionally mislabeling testing results, (2) violating a court discovery order, (3) failing to timely add parties and claims in the Underlying Suit, and (4) attempting to force Haase into taking a low settlement. Haase also asserted that the Abraham Watkins Parties’ alleged breaches of fiduciary duty constituted professional negligence.

Summary-Judgment Motions at Issue in this Appeal

The Abraham Watkins Parties filed- two traditional summary-judgment motions. In. the first motion, filed in February 2014 (“February Motion”), the Abraham Watkins Parties asserted the following summary-judgment grounds:

(1) Haase had the opportunity to amend his pleadings to include additional tort-feasors after the- Abraham Watkins Parties withdrew from the litigation so the Abraham Watkins Parties’ .withdrawal did not cause Haase any damages;
(2) Haase had the opportunity to amend his pleadings to include' additional claims, including fraud, after the Abraham Watkins Parties withdrew from the litigation, so the Abraham Watkins Parties’ withdrawal did not cause any damages;
(3) Haase has no claim for damages because his patent was invalid and no trade secrets were misappropriated.

After filing this motion, Haase amended his petition and filed the live pleading.

The Abraham Watkins Parties filed a second traditional summary-judgment motion in May 2014 (“May Motion”). In that motion, the Abráham Watkins Parties asserted that the statute of limitations barred Haase’s claims, against Sorrels for damages resulting from sanctions and the Abraham Watkins Parties were entitled to summary judgment on Haase’s remaining claims based on breach of fiduciary duty because (1) Haase did not have a trade-secret-misappropriation claim since there was no trade secret and (2) Haase did not have a patent-infringement claim given he held an invalid patent. -

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Richard Alan Haase v. Abraham, Watkins, Nichols, Sorrels and Friend, LLP and Randy Sorrells, 499 S.W.3d 169, 2016 Tex. App. LEXIS 7530, 2016 WL 3902735 (Tex. Ct. App. 2016).

499 S.W.3d 169 (Richard Alan Haase v. Abraham, Watkins, Nichols, Sorrels and Friend, LLP and Randy Sorrells) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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