Elizondo v. Krist

• Decision Date: 30 August 2013
• Docket Number: No. 11-0438,11-0438
• Parties: JOSE L. ELIZONDO AND GUILLERMINA ELIZONDO, PETITIONERS, v. RONALD D. KRIST, THE KRIST LAW FIRM, P.C., KEVIN D. KRIST, AND WILLIAM T. WELLS, RESPONDENTS
• Court: Texas Supreme Court

JOSE L. ELIZONDO AND GUILLERMINA ELIZONDO, PETITIONERS, v. RONALD D. KRIST, THE KRIST LAW FIRM, P.C.,KEVIN D. KRIST, AND WILLIAM T. WELLS, RESPONDENTS

No. 11-0438

SUPREME COURT OF TEXAS

OPINION DELIVERED: August 30, 2013

ON PETITION FOR REVIEW FROM THE

COURT OF APPEALS FOR THE FOURTEENTH DISTRICT OF TEXAS

JUSTICE BOYD, joined by JUSTICE LEHRMANN, dissenting.

To prove the existence of legal malpractice damages, clients who sue their attorneys must establish that "the result obtained for the client" was less (or lower or worse) than "the result that would have been obtained with competent counsel." See ante at _. The Court holds that Jose and Guillermina Elizondo failed to submit any evidence that could meet that burden, despite their expert's testimony that, in his opinion, the attorneys' breaches of their duties caused the Elizondos to settle their claims "basically for nuisance value," and "a reasonably competent plaintiff's lawyer . . . would have garnered far in excess" of that amount. I believe the Court imposes too strict a standard at this summary judgment stage. Because the expert based his opinion on facts that could support a finding that the Elizondos' claims had substantial merit but were settled as if they had no merit at all, I would hold that the Elizondos created a fact issue on the existence of malpractice damages. I therefore respectfully dissent.

I.Standard of Review

This is an appeal from a summary judgment. We must consider the evidence in the light most favorable to the Elizondos, indulging every reasonable inference and resolving any doubts in their favor. See City of Keller v. Wilson, 168 S.W.3d 802, 824 (Tex. 2005); see also Shah v. Moss, 67 S.W.3d 836, 844 (Tex. 2001). The trial court found that the Elizondos submitted no evidence that they incurred any damages as a result of the defendants' alleged breaches. At this stage of the case, the Elizondos did not have to prove the amount of their damages; they only had to create a fact issue as to the existence of damages—that is, whether they sustained any damages at all. To do this, they had to "produce some evidence from which a reasonable jury could infer" that they sustained some damages. See Garcia v. Gomez, 319 S.W.3d 638, 642 (Tex. 2010) (observing that even though there was no evidence of amount of damages, there was evidence that some damages were incurred); see also Alexander v. Turtur & Assocs., Inc., 146 S.W.3d 113, 117 (Tex. 2004) (noting that plaintiff must "produce evidence from which a jury may reasonably infer that the attorney's conduct caused the damages alleged") (citing Haynes & Boone v. Bowser Bouldin, Ltd., 896 S.W.2d 179, 181 (Tex. 1995)). If they have done this, we must reverse the trial court's summary judgment.

II.A Qualified Expert Witness

The Elizondos relied primarily on the affidavit of their expert witness, Arturo J. Gonzalez. According to his affidavit, Gonzalez is a Texas lawyer who has specialized in personal injury claims for over twenty years. Following a 2005 explosion at BP Amoco Chemical Company's plant in Texas City, Gonzalez assisted in the representation of over 525 plaintiffs who, like the Elizondos,asserted claims for damages against BP. For most of that time, Gonzalez served as the plaintiffs' court-appointed liaison counsel to facilitate discovery and the exchange of information between the parties. He "was intimately involved on a day to day basis with the settlement process" involving these claims, and participated in numerous settlement conferences with BP's representatives and attorneys. He was "directly responsible" for negotiating and settling three cases, and has personal knowledge of the values for which most of the other claims were settled. The defendants may ultimately dispute Gonzalez's assertions and qualifications and, at trial, would be free to disprove them or otherwise undermine his credibility or the reliability of his opinions. But for purposes of summary judgment, as the Court acknowledges, Gonzalez's affidavit establishes that he is "an experienced attorney whose credentials are not the problem."¹ Ante at _.

III.An Acceptable Method of Proof

We have previously held that a client who was the plaintiff in an underlying case can establish the existence of malpractice damages by proving that the amount the client recovered was less than the amount "that would have been recoverable and collectible if the other case had been properly prosecuted." Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. Nat'l Dev. & Research Corp., 299 S.W.3d 106, 112 (Tex. 2009). Because we have focused on the recoverable and collectible amount of a judgment following trial, courts often refer to this method of proving damages as a "suit-within-a-suit." See, e.g., Taylor v. Alonso, Cersonsky & Garcia, P.C., 395 S.W.3d 178, 183 (Tex. App.—Houston [1st Dist.] 2012, no pet.) ("This causation burden in this type of legal malpractice claim has been called the 'suit-within-a-suit' requirement.") (citing Greathouse v. McConnell, 982 S.W.2d 165, 173 (Tex. App.—Houston [1st Dist.] 1998, pet. denied)).

Today, the Court holds that a client who was a plaintiff "in a mass tort litigation involving thousands of similar claimants and arising out of the same event" can also establish the existence of malpractice damages by proving that the amount the client received in settlement is lower than the amounts of "the settlements obtained in other cases . . . arising from the event." Ante at _. This holding is consistent with the Court's comments in Burrow v. Arce, 997 S.W.2d 229, 236 (Tex. 1999) (noting that the expert "might have . . . compared these settlements to those of similar claims"), and I agree with it. I also agree with the Court's holding that Gonzalez's affidavit was insufficient under this "comparison-of-settlements" method. Gonzalez "did not undertake to compare the Elizondo settlement with other actual settlements obtained in the BP litigation." Ante at _. He did not state the values for which any of the other cases settled, and he did not assert that the Elizondos' claims were comparable to, but settled for less than, any of the other cases.²

But the Elizondos did not rely on the comparison-of-settlements method. Instead, they challenged the defendants' "faulty premise" that the "only way of proving damages is by showing that someone else with identical injuries and claims received a larger settlement." See ante at _.I agree with the Elizondos that the suit-within-a-suit and the comparison-of-settlements methods are not the only ways to prove the existence of legal malpractice damages. Just as our decisions "do not require that damages can only be measured against the result the client would have obtained if the case had been tried in court to a final judgment," ante at _, they also do not require that damages can only be measured against the result the client would have obtained if the case had settled for the amounts for which similar cases settled. Since malpractice damages are "the difference between the result obtained and the case's 'true value,'" see ante at _, I would hold that any method that provides competent evidence that the case's "true value" was greater than the "results obtained" will suffice to raise a fact issue on the existence of malpractice damages. And I would hold that, by submitting sufficient expert opinion evidence that their claims had merit but were settled as if they had none, the Elizondos satisfied that burden.

IV.Sufficient Expert Opinions

Gonzalez did not utilize the comparison-of-settlements method because confidentiality agreements prohibited him from disclosing the amounts for which other cases settled. Nor did he utilize the suit-within-a-suit method, presumably because BP settled every one of the 2005 explosion claims prior to the entry of any judgment. Instead, after stating his experience and qualifications, explaining the confidentiality of BP's settlement amounts, listing the factors that BP considered when determining the settlement value of a case, stating his opinion of the general settlement value of the Elizondos' claims, listing the sources on which he relied, describing the things that a reasonably diligent attorney would have done to pursue the Elizondos' claims, and listing the specificways in which the attorney defendants failed to meet that standard, Gonzalez stated his opinions as follows:

The settlement offer made by BP for the Elizondos' claim was basically for nuisance value. Given the extraordinary circumstances surrounding the BP explosions claims, a reasonably competent plaintiff's lawyer should have continued to prosecute the claim until a fair and reasonable offer was made by BP. In my opinion, had that been done, the Lawyers would have garnered far in excess of the $50,000 offer[.]

(Emphasis added.) In Gonzalez's opinion, the $50,000 that the Elizondos received to settle their claim was "basically for nuisance value" and not a "fair and reasonable" amount based on the merits of the claim.

Although Gonzalez did not define "nuisance value," its meaning is common knowledge, at least among American litigators and judges: a nuisance value settlement is a settlement of meritless, frivolous, or groundless claims for an amount that is less than the defendant would have to spend to defeat them. See, e.g., Valores Corp. v. McLane Co., 945 S.W.2d 160, 169 (Tex. App.—San Antonio 1997, writ denied) (noting that summary judgment rule was intended to dispose of "groundless actions instituted by plaintiffs seeking to harass defendants into nuisance value settlements") (quoting Roy W. McDonald, Summary Judgment, TEX. L. REV. 286, 286 (1952)); Wolcott v. Trailways Lines, Inc., 774 So. 2d 1054, 1055 n.1 (2nd Cir. 2000) ("The 'nuisance value' of a claim is generally considered to be the cost of defending a claim in which it is doubtful the plaintiff will prevail, but is unwilling to simply dismiss."); Fletcher v. City of Fort Wayne, Ind., 162 F.3d 975, 976 (7th Cir. 19...