Alexander v. Turtur & Associates, Inc.

• Citation: 146 S.W.3d 113
• Decision Date: 27 August 2004
• Docket Number: No. 02-1009.,02-1009.
• Court: Supreme Court of Texas
• Parties: Tom ALEXANDER, Individually, and Alexander & McEvily, Petitioners, v. TURTUR & ASSOCIATES, INC., Mario Turtur, Steve Turtur, and the Turtur Family Partnership, Respondents.

146 S.W.3d 113

Tom ALEXANDER, Individually, and Alexander & McEvily, Petitioners, v. TURTUR & ASSOCIATES, INC., Mario Turtur, Steve Turtur, and the Turtur Family Partnership, Respondents.

No. 02-1009.

Supreme Court of Texas.

Argued on December 3, 2003.

Decided August 27, 2004.

Rehearing Denied November 5, 2004.

Appeal from the 125th District Court, Harris County, John Coselli, Jr., J Ronald D. Krist, Krist Law Firm, P.C., Houston, for amicus curiae.

Gwen J. Samora, Marie R. Yeates, Jennifer H. Davidow, Vinson & Elkins, L.L.P., Houston, for Petitioners.

Valorie W. Davenport, Davenport Legal Group, Levon G. Hovnatanian, Bruce Edwin Ramage, Kevin Graham Cain, Dale Jefferson, Martin Disiere Jefferson & Wisdom, L.L.P., Daryl L. Moore, Storey Moore & McCally, P.C., Houston, for Respondents.

Chief Justice PHILLIPS delivered the opinion of the Court.

The principal issue in this legal malpractice case is whether the jury needed expert testimony to determine whether the client would have prevailed in an underlying trial but for its attorneys' alleged negligence in preparing and trying the case. The trial court concluded that the jury needed such guidance to determine causation. There being none, the court disregarded the jury's findings on causation and rendered judgment that the client take nothing. Concluding that expert testimony was not needed because the connection between the attorneys' negligence and the client's loss was obvious, the court of appeals reversed and remanded. 86 S.W.3d 646, 662. We disagree that the causal connection was either obvious or a matter within the common understanding of lay persons. Because we conclude that there is no competent evidence to connect the client's damages to its attorneys' negligence, we reverse the court of appeals' judgment and render judgment that the client take nothing.

I

Mario Turtur and his two sons, Steve and Chris, are brokers with Turtur & Associates, Inc. ("Turtur Inc."), a securities firm. Dr. Lee McKellar owns and operates McKellar Ranch, Inc., a cattle business. In 1982, Turtur Inc. agreed with McKellar Ranch to be the exclusive marketer of two cattle-related investments: (1) donor cow interests and (2) cattle "embryo transplants."¹ Although the parties had disagreements about the investment program, Turtur Inc. continued to market it through 1984.

In 1985, Turtur Inc. sued McKellar Ranch and Dr. McKellar, alleging fraud and breach of contract in state court and claiming damages of about $500,000. McKellar Ranch counterclaimed for fraud, misrepresentation, and breach of fiduciary duty. McKellar Ranch thereafter sought bankruptcy protection in the United States Bankruptcy Court for the Eastern District of Texas, staying the state court proceeding. Turtur Inc.'s claims against McKellar Ranch were severed and made a part of an adversary proceeding in the bankruptcy court.² The claims against Dr. McKellar remained in state court.

Joe Reynolds, a Houston attorney, and John Hardy, a Tyler bankruptcy attorney, initially represented Turtur Inc. in the bankruptcy court. After obtaining a continuance, Reynolds withdrew as counsel, compelling Turtur Inc. to look for a new lead trial attorney. About two months before the rescheduled adversary proceeding was to begin trial in Tyler, Turtur Inc. hired the Houston law firm of Alexander & McEvily to represent it, paying a retainer of $10,000 with the understanding that name partner Tom Alexander would be lead counsel. Judy Mingledorff, a new associate at the firm, was assigned to help prepare the case. Hardy continued to serve as local counsel.

On June 15, 1987, two days before the adversary proceeding was to begin, Alexander appeared for a docket call in Harris County state district court and announced ready for trial. The district judge set this case to begin trial the next day. On June 17, Mingledorff filed a motion for continuance in the bankruptcy court based on Alexander's assignment for trial in state court. McKellar Ranch opposed the motion, and the judge denied the continuance. The case proceeded to trial with Mingledorff and Hardy representing Turtur Inc.

By order, the court limited the trial of the adversary proceeding to two days. Despite the short trial, the court considered the matter for over two years before rendering its decision on July 20, 1989. By this time, Alexander no longer represented Turtur Inc., primarily because of a dispute over whether Alexander was entitled to keep the $10,000 retainer since he had been unable to try the adversary proceeding himself.

In its judgment, the bankruptcy court concluded that both Turtur Inc. and McKellar Ranch had breached certain parts of their agreements and that Turtur Inc. had committed fraud as well. McKellar Ranch predominantly prevailed and was awarded net damages of $105,718.80. In a subsequent settlement, Turtur Inc. paid McKellar $37,500 and dropped its state court claim against Dr. McKellar individually to set this judgment aside.

Three months later, Turtur Inc. brought this suit against Alexander and his firm for malpractice, claiming that their negligence proximately caused its loss in the bankruptcy court trial. Turtur Inc. also alleged breach of fiduciary duty and breach of contract and asserted that it was entitled to damages of not less than $500,000 and to recoup $45,000 in attorneys' fees paid to the defendants. Thereafter, Turtur Inc. amended its pleadings to claim violations of several provisions of the Deceptive Trade Practices Act. See Tex. Bus. & Comm.Code § § 17.41-.63. The amended pleadings also added Mario, Chris, and Steve Turtur as plaintiffs but did not otherwise identify any claim distinct from those asserted by Turtur Inc. The trial court granted special exceptions to the amended petition and ordered the plaintiff to replead "to drop [the Turturs], Individually, from this lawsuit," and "to specify the maximum amount of damages being claimed in this lawsuit."

In response to these special exceptions, Turtur Inc. filed its Second Amended Petition alleging that the defendants' negligence and statutory violations caused it $650,000 in damages. Plaintiffs' Second Amended Petition also dropped Chris Turtur as a plaintiff, but left Mario and Steve Turtur as plaintiffs, asserting for the first time a claim specific to them. The amended pleading identified Mario and Steve Turtur as "successors in interest, d/b/a The Turtur Family Partnership with respect to their interests in donor cow interests and certain cattle in the possession of McKellar Ranch, Inc. in the summer of 1987." The Turturs alleged that Alexander and his firm had cost the partnership $3.9 million in lost profits by negligently authorizing the sale of these cattle in 1987. Concluding that the partnership's claim was barred by limitations, the trial court granted defendants' motion for partial summary judgment, leaving only Turtur Inc.'s legal malpractice and DTPA claims for trial.

At trial, the jury found in favor of Turtur Inc. on both theories, awarding over $3 million in damages. The trial court denied Turtur Inc.'s motion to amend its petition to conform to the award, but it granted Alexander and his firm's motion for judgment notwithstanding the verdict on the grounds that plaintiff had presented no evidence of causation or damages. Turtur Inc., along with Mario and Steve Turtur, appealed the trial court's take-nothing judgment.

The court of appeals affirmed the summary judgment against the Turturs on the partnership claim, but it reversed the take-nothing judgment for Alexander and his firm on the legal malpractice and DTPA claims, remanding to the trial court with instructions to conform the jury award of damages to Turtur Inc.'s pleadings. 86 S.W.3d at 662. Both Alexander and his firm and the Turturs petitioned this Court for review.

II

To prevail on a legal malpractice claim, a plaintiff must show "that (1) the attorney owed the plaintiff a duty, (2) the attorney breached that duty, (3) the breach proximately caused the plaintiff's injuries, and (4) damages occurred." Peeler v. Hughes & Luce, 909 S.W.2d 494, 496 (Tex.1995). When the plaintiff's allegation is that some failure on the attorney's part caused an adverse result in prior litigation, the plaintiff must produce evidence from which a jury may reasonably infer that the attorney's conduct caused the damages alleged. Haynes & Boone v. Bowser Bouldin, Ltd., 896 S.W.2d 179, 181 (Tex.1995). To prevail on a claim under the DTPA, a plaintiff must prove that a violation of the statute was a producing cause of the injury. Tex. Bus. & Comm.Code § 17.50(a). While different, both producing cause and proximate cause require proof of causation in fact. Union Pump Co. v. Allbritton, 898 S.W.2d 773, 775 (Tex.1995). In this Court, Alexander and his firm contest only the jury's findings of causation and damages.

The court of appeals held that the evidence of causation was legally sufficient, parsing through these facts to establish that, but for the negligence of Alexander and his firm, the result in the adversary proceeding would have been more favorable to Turtur Inc.:

! Alexander, an experienced civil trial lawyer, agreed to personally try and oversee the preparation of the Turturs' case but did not follow through with his agreement.

! Mingledorff, a new associate and former assistant district attorney with no civil trial or bankruptcy court experience, instead acted as lead trial attorney.

! At the adversary proceeding, Mingledorf called only two witnesses, Mario and Chris Turtur. Mingledorff did not adequately prepare Mario for his testimony. She did not call Steve Turtur, although he was available and was the Turtur most knowledgeable about the dealings with McKellar.

! Mingledorff's direct examination of Mario Turtur covers only 16 pages in the reporter's record whereas his testimony at the malpractice trial runs 1318 pages. Steve Turtur's testimony at the malpractice trial covers 505 pages.

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