Cantey Hanger, LLP v. Byrd

Decision Date26 June 2015
Docket NumberNo. 13–0861,13–0861
Citation467 S.W.3d 477
PartiesCantey Hanger, LLP, Petitioner, v. Philip Gregory Byrd, Lucy Leasing Co., L.L.C., and PGB Air, Inc., Respondents
CourtTexas Supreme Court

Lindsey Rames, Dallas, for Respondents.

Stephen L. Tatum, Joseph W. Spence, Lisa Vaughn Lumley, Fort Worth, Melvin Keith Ogle, for Petitioner.


Justice Lehrmann delivered the opinion of the Court, in which Justice Guzman, Justice Boyd, Justice Devine, and Justice Brown joined.

This case concerns the scope of attorneys' immunity from civil liability to non-clients. Following the trial court's entry of a divorce decree, one of the divorce litigants sued opposing counsel for fraud and related claims in connection with the law firm's alleged preparation of a document to effectuate the transfer of personal property awarded to its client in the decree. Specifically, the litigant alleged that the document contained misrepresentations and that the firm structured the property's transfer in a manner that shifted certain tax liabilities to the litigant in contravention of the decree. The law firm moved for summary judgment, arguing that it was immune from liability to a non-client for conduct within the scope of representation of its client in the divorce proceedings. The trial court granted the motion, but the court of appeals reversed, holding that the firm's alleged conduct was unrelated to the divorce litigation and that the firm had not conclusively established its entitlement to immunity. We hold that the firm established its affirmative defense of attorney immunity as a matter of law and therefore reverse the court of appeals' judgment.

I. Background

Philip Byrd and Nancy Simenstad commenced divorce proceedings in 2006. Simenstad was represented in the divorce proceedings by Vick, Carney & Smith, LLP, and then by Cantey Hanger, LLP. The divorce proceedings were highly contentious, but in August 2008 the parties settled, resulting in the trial court's entry of an agreed divorce decree.

The decree awarded Simenstad three aircraft as her separate property, including a Piper Seminole that had been owned by Lucy Leasing Co., LLC, a company the decree awarded to Byrd. The decree also made Simenstad responsible for all ad valorem taxes, liens, and assessments on the aircraft. Finally, the decree ordered the parties to “execute with[in] ten days from the entry of this decree any documents necessary to effectuate the transfers contemplated herein, which shall include ... documents necessary to transfer ownership of airplanes and the like.” The “attorney for the non-signing party was ordered to “draft the documents necessary to effectuate the transfers contemplated [in the decree].” The record does not reflect, and no party asserts, that any transfer documents regarding the Piper Seminole at issue were executed within the time frame specified in the decree.

Byrd, Lucy Leasing, and PGB Air, Inc. (another company awarded to Byrd in the decree) sued Simenstad and Cantey Hanger,1 alleging in pertinent part that, over a year after the decree was entered, Simenstad and Cantey Hanger falsified a bill of sale transferring the Piper Seminole from Lucy Leasing to a third party. Specifically, the plaintiffs alleged that Simenstad executed the bill of sale as Nancy Byrd,” a “manager” of Lucy Leasing, even though her last name had previously been legally changed to Simenstad and she “was never an owner, officer, or manager” of Lucy Leasing. They brought claims against Cantey Hanger for fraud, aiding and abetting, and conspiracy, asserting that Cantey Hanger falsified the bill of sale in order to shift tax liability for the Piper Seminole from Simenstad to Byrd in contravention of the decree.2 Cantey Hanger answered with a general denial, a verified denial, and several affirmative defenses, including “litigation immunity or other common law immunity doctrines.”

Cantey Hanger moved for summary judgment on attorney-immunity grounds, arguing that it owed no duty to Byrd or the other plaintiffs and that as a matter of law it was not liable to the plaintiffs for actions taken in the course and scope of its representation of Simenstad in the divorce proceeding.3 Exhibits to Cantey Hanger's motion included the decree and affidavits from two Cantey Hanger attorneys attesting that Cantey Hanger was retained to represent Simenstad in the divorce proceedings and that [a]ll actions taken by Cantey Hanger with respect to Plaintiffs were made in the course and scope of representing Ms. Simenstad.”4

The plaintiffs responded that Cantey Hanger's conduct—[c]onspiring with and aiding a client to falsify documents [and] evade tax liability”—was “wrongful,” was not “part of the discharge of [Cantey Hanger's] duties in representing [its] client,” and thus was not protected by attorney immunity. They argued more broadly that the claims against Cantey Hanger “should be permitted because they involve fraudulent conduct.” In an affidavit submitted as an exhibit to the response, Byrd testified that he had never received documents from Cantey Hanger to sign in order to effectuate the transfer of the Piper Seminole from Lucy Leasing to Simenstad, that he discovered the plane had been transferred directly to a third party, that Simenstad had signed the bill of sale as manager of Lucy Leasing even though he was the sole manager, that the plane was still registered to Lucy Leasing, and that the transaction made Lucy Leasing responsible for the sales tax.5

The trial court granted Cantey Hanger's summary-judgment motion and dismissed all claims against it with prejudice. The court of appeals reversed as to the fraud, aiding-and-abetting, and conspiracy claims relating to the sale of the plane. 409 S.W.3d at 782–83. The court held that, although attorneys enjoy qualified immunity from civil liability to non-clients for actions taken in connection with representing a client in litigation, Cantey Hanger was not entitled to such immunity. Id. at 779–81. The court concluded that Cantey Hanger's allegedly fraudulent conduct involving the “subsequent sale” of the plane awarded to Simenstad “was not required by, and had nothing to do with, the divorce decree,” and thus was “outside the scope of representation of a client.” Id. at 781. The dissent in that court would have held that Cantey Hanger “established as a matter of law that its conduct was within the course of its representation of its client in the underlying divorce litigation against Byrd” and was thus entitled to summary judgment on its immunity defense. Id. at 788, 790 (Gardner, J., dissenting). We granted Cantey Hanger's petition for review to address the parties' dispute over the scope and application of the attorney-immunity doctrine.

II. Standard of Review

We review a grant of summary judgment de novo. State v. Ninety Thousand Two Hundred Thirty–Five Dollars & No Cents in U.S. Currency ($90,235), 390 S.W.3d 289, 292 (Tex.2013). A party moving for traditional summary judgment has the burden to prove that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c) ; Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex.2009). “When reviewing a summary judgment, we take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor.” Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.2005). Attorney immunity is an affirmative defense. Sacks v. Zimmerman, 401 S.W.3d 336, 339–40 (Tex.App.–Houston [14th Dist.] 2013, pet. denied). Therefore, to be entitled to summary judgment, Cantey Hanger must have proven that there was no genuine issue of material fact as to whether its conduct was protected by the attorney-immunity doctrine and that it was entitled to judgment as a matter of law.

III. Attorney Immunity

Texas common law is well settled that an attorney does not owe a professional duty of care to third parties who are damaged by the attorney's negligent representation of a client. Barcelo v. Elliott, 923 S.W.2d 575, 577 (Tex.1996) ; see also McCamish, Martin, Brown & Loeffler v. F.E. Appling Interests, 991 S.W.2d 787, 792 (Tex.1999) (explaining that a lack of privity precludes attorneys' liability to non-clients for legal malpractice). However, Texas courts have developed a more comprehensive affirmative defense protecting attorneys from liability to non-clients, stemming from the broad declaration over a century ago that “attorneys are authorized to practice their profession, to advise their clients and interpose any defense or supposed defense, without making themselves liable for damages.” Kruegel v. Murphy, 126 S.W. 343, 345 (Tex.Civ.App.1910, writ ref'd). This attorney-immunity defense is intended to ensure “loyal, faithful, and aggressive representation by attorneys employed as advocates.” Mitchell v. Chapman, 10 S.W.3d 810, 812 (Tex.App.–Dallas 2000, pet. denied).

In accordance with this purpose, there is consensus among the courts of appeals that, as a general rule, attorneys are immune from civil liability to non-clients “for actions taken in connection with representing a client in litigation.” Alpert v. Crain, Caton & James, P.C., 178 S.W.3d 398, 405 (Tex.App.–Houston [1st Dist.] 2005, pet. denied) ; see also Toles v. Toles, 113 S.W.3d 899, 910 (Tex.App.–Dallas 2003, no pet.) ; Renfroe v. Jones & Assocs., 947 S.W.2d 285, 287–88 (Tex.App.–Fort Worth 1997, pet. denied). Even conduct that is “wrongful in the context of the underlying suit” is not actionable if it is “part of the discharge of the lawyer's duties in representing his or her client.” Toles, 113 S.W.3d at 910–11 ; Alpert, 178 S.W.3d at 406 ; see also Dixon Fin. Servs., Ltd. v. Greenberg, Peden, Siegmyer & Oshman, P.C., No. 01–06–00696–CV, 2008 WL 746548, at *7 (Tex.App.–Houston [1st Dist.] March 20, 2008, pet. denied) (mem....

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