Cosgrove v. Grimes

• Decision Date: 28 June 1989
• Docket Number: No. C-8089,C-8089
• Parties: Frank COSGROVE, Petitioner, v. Walter GRIMES et al., Respondents.
• Court: Texas Supreme Court

Page 662

774 S.W.2d 662

Frank COSGROVE, Petitioner, v. Walter GRIMES et al., Respondents.

No. C-8089.

Supreme Court of Texas.

June 28, 1989.

Timothy H. Pletcher, Helm, Pletcher, Hogan, Bowen & Saunders, Houston, for petitioner.

George D. Gordon, Baggett & Gordon, Richard S. Browne, Houston, for respondents.

OPINION ON MOTION FOR REHEARING

SPEARS, Justice.

Our opinion and judgment of April 19, 1989 are withdrawn and the following substituted therefor:

The issues in this case concern the applicability of the "good faith" defense in legal malpractice actions. The trial court held that the exception barred client Frank Cosgrove from recovering on his claim. The court of appeals affirmed. 757 S.W.2d 508. We reverse and render judgment for Cosgrove.

In July 1976, Cosgrove was injured when the automobile he was driving was struck from the rear by a car driven by Will Michael Stephens. Timothy Purnell was a passenger in Stephens' car at the time of the accident which occurred on Decker Drive, south of the intersection with Airhart in Baytown, Texas. The Baytown Police Department was called, and an accident report was made by the responding officer.

Soon after the accident, Cosgrove contacted attorney Ed W. Bass, Jr. regarding the accident. Cosgrove executed a power of attorney which designated Bass and Walter Grimes, also an attorney, to represent his interest in the claim. Bass apparently performed no investigation of the circumstances surrounding the case and no lawsuit was filed by Bass. Some time after this initial meeting and before July 1978, Bass notified Cosgrove that he was leaving the state and was turning his automobile collision claim over to Grimes. It is disputed at what point Grimes was notified of the circumstances surrounding the automobile collision. At some time before the statute of limitations ran, however, Grimes filed suit against Purnell.

After the statute of limitations had run, Cosgrove learned that suit had been filed against the wrong person. Grimes, alleging that he had relied on Cosgrove's information, had filed suit against the passenger in the car which struck Cosgrove, rather than Stephens, the car's driver. Cosgrove also discovered that Grimes had alleged the wrong location of the accident.

Based upon errors in the suit filed, Cosgrove sued attorneys Bass and Grimes, and another attorney, Don Hendrix. ¹ Cosgrove's malpractice suit alleged negligence, breach of contract, false representations and Deceptive Trade Practices Act ("DTPA") violations under a theory of breach of implied warranty. ² This suit was consolidated with Cosgrove's personal injury claim.

Eventually, the defendant Hendrix was dropped, and the suit against the remaining defendants proceeded to trial before a jury. Most of the evidence at trial regarding the legal malpractice claim concerned only Grimes. Grimes insisted that he had no knowledge of Cosgrove's cause of action until July 10, 1978, five days before the two-year statute of limitations would run. Grimes testified that on that date he met with Cosgrove and received information concerning the name of the party to sue and the accident's location. Grimes also stated he had not been notified that his name was on the power of attorney executed by Cosgrove, and that he had never been engaged in a partnership with Bass. Cosgrove testified that he contacted and met with Grimes shortly after Bass left the state. Cosgrove said the contact, five days before limitations ran, was actually only a telephone inquiry about the status of the case.

The jury found that Stephens, the driver of the car that hit Cosgrove, had been negligent and that such negligence was a proximate cause of the accident. The jury also found that Cosgrove would probably have collected $2,000 from Stephens as damages resulting from the collision.

The jury also found that Grimes had been negligent and that such negligence was a proximate cause of damages to Cosgrove. Further, the jury found that Grimes had failed to use "reasonable and ordinary care and diligence" in prosecuting the suit arising from the automobile collision, that this failure adversely affected Cosgrove, and that $500.00 would compensate Cosgrove for the mental anguish he suffered as a result of Grimes' representation. No issues were submitted regarding the role of attorney Bass.

Grimes submitted proposed issues which included a good faith defense to a legal malpractice claim. Cosgrove objected to these issues as merely evidentiary, as submitting an inferential rebuttal issue, and as failing to properly submit all elements of any good faith defense, should one exist. The trial court submitted the two issues over Cosgrove's objections. The jury found Grimes had in good faith relied on the information given to him by Cosgrove, and based upon that information, Grimes had acted in Cosgrove's best interest.

Having received favorable jury answers on their submitted issues, both Cosgrove and Grimes moved for judgment on the verdict. Cosgrove later filed a motion to disregard the special issues concerning Grimes' good faith and whether his actions were in Cosgrove's best interest. The trial court denied this motion, and judgment was rendered that Cosgrove take nothing in his suit against the passenger, Purnell, and that he take nothing against Grimes or Bass.

The court of appeals affirmed, holding that the good faith exception to attorney negligence applied when the attorney exercised his best judgment in what he believed was his client's best interests. 757 S.W.2d 508. The court of appeals also ruled that the issue of good faith was defensive, rather than an inferential rebuttal, and thus its submission in this case was proper. Finally, the court held that Cosgrove had not properly submitted issues concerning his DTPA claim, and thus the trial court properly denied him recovery on that cause of action.

In his application for writ of error in this court Cosgrove advances two arguments. First, he contends the good faith exception to attorney negligence should be abolished because it allows attorney conduct to be measured by a lower standard of care than that of other professions. Second, he argues that the jury's answers to the issues submitted establish his right to recover based on negligence and also breach of implied warranty under the DTPA.

An attorney malpractice action in Texas is based on negligence. Fireman's Fund Amer. Ins. Co. v. Patterson & Lamberty, Inc., 528 S.W.2d 67 (Tex.Civ.App.--Tyler 1975, writ ref'd n.r.e.); Patterson & Wallace v. Frazer, 79 S.W. 1077 (Tex.Civ.App. 1904, no writ), appeal after remand, 93 S.W. 146 (Tex.Civ.App.), rev'd on other grounds, 100 Tex. 103, 94 S.W. 324 (1906). Some courts have held that if an attorney makes an error in judgment, but acted in good faith and in what the attorney believed was the client's best interest, the attorney is not liable for malpractice. See e.g., Cook v. Irion, 409 S.W.2d 475 (Tex.Civ.App.--San Antonio 1966, no writ). In the instant case the jury found that Grimes had acted in good faith in relying on the information Cosgrove allegedly furnished to Grimes, and the trial court rendered judgment for Grimes.

There is no subjective good faith excuse for attorney negligence. A lawyer in Texas is held to the standard of care which would be exercised by a reasonably prudent attorney. The jury must evaluate his conduct based on the information the attorney has at the time of the alleged act of negligence. In some instances an attorney is required to make tactical or strategic decisions. Ostensibly, the good faith exception was created to protect this unique attorney work product. However, allowing the attorney to assert his subjective good faith, when the acts he pursues are unreasonable as measured by the reasonably competent practioner standard, creates too great a burden for wronged clients to overcome. The instruction to the jury should clearly set out the standard for negligence in terms which encompass the attorney's reasonableness in choosing one course of action over another.

If an attorney makes a decision which a reasonably prudent attorney could make in the same or similar circumstance, it is not an act of negligence even if the result is undesirable....