Finger v. Ray

• Decision Date: 30 August 2010
• Docket Number: No. 01-09-00404-CV.,01-09-00404-CV.
• Citation: 326 S.W.3d 285
• Parties: Christine FINGER, Appellant, v. Hugh M. RAY, III and Weycer, Kaplan, Pulaski, and Zuber, P.C., Appellees.
• Court: Texas Court of Appeals

326 S.W.3d 285

Christine FINGER, Appellant,

v.Hugh M. RAY, III and Weycer, Kaplan, Pulaski, and Zuber, P.C., Appellees.

No. 01-09-00404-CV.

Court of Appeals of Texas, Houston (1st Dist.).

Aug. 5, 2010.

Rehearing Overruled Aug. 30, 2010.

Wayne H. Paris, Gillis, Paris & Heinrich, P.L.L.C., Houston, TX, for Appellant.

Billy Shepherd, Cruse, Scott, Henderson & Allen, L.L.P., Houston, TX, for Appellees.

Panel consists of Justices JENNINGS, HANKS, and BLAND.

OPINION

JANE BLAND, Justice.

A client sued her lawyer, alleging wrongful acts arising from his representation of her during bankruptcy litigation.The trial court granted summary judgment in favor of the lawyer and his firm on the client's claims, but it denied summary judgment on her claim for equitable disgorgement of the attorney's fees she incurred.After the trial court denied summary judgment on the fee forfeiture claim, the client abandoned it, and pursues on appeal only her claims for actual damages.The client contends that (1)the trial court erred in requiring expert testimony to prove causation of actual damages, and (2) her lay testimony about causation raises a material fact issue.We hold that the causal connection between the conduct alleged and any injury is not within a jury's common understanding, and thus the trial court properly ruled that expert testimony was necessary to show that the lawyer's acts caused the client actual damages.We affirm the judgment of the trial court.

Background

A Lawsuit and Judgment

In 2003, Christine Finger borrowed $10,000 from David Reitman, who acceptedjewelry, which Finger valued at $29,495, as collateral.Although Finger repaid a portion of the loan and Reitman forgave the balance, he did not return the jewelry.Instead, he told Finger that someone had stolen it from his car.Finger hired a lawyer and sued Reitman for fraud, breach of contract, and various other causes of action.She moved for summary judgment on the breach of contract claim.The trial court granted it, entering an "Agreed Final Summary Judgment," awarding Finger $29,495 in damages and $1200 in attorney's fees.Shortly after the trial court signed the final judgment, Reitman told Finger that he planned to file for bankruptcy.

The Bankruptcy Proceedings

Upon hearing this news, Finger hired the defendants in this case, Hugh M. Ray and Weycer, Kaplan, Pulaski & Zuber, P.C., to represent her in collecting the judgment against Reitman and in any potential bankruptcy litigation.According to Finger, she hired Ray based upon his "express representations ... that he would collect [her] judgment through state court collection methods that would also provide [her] with attorney[']s fees and costs of pursuit and collection, that the judgment that [she] possessed was based upon fraud by Mr. Reitman, that if Mr. Reitman filed personal bankruptcy that he, Mr. Ray, would file an action in the bankruptcy court to except [her] claim out of the bankruptcy, and then he would further proceed with the collection outside of any bankruptcy proceeding."

Reitman filed for bankruptcy.During the pendency of the proceedings, Ray conducted an examination of Reitman.Ray and the bankruptcy trustee then jointly filed a Section 727 action to bar Reitman's bankruptcy discharge.See11 U.S.C. § 727(2006).Ray did not file a Section 523 action, which seeks to remove a specific debt from the debtor's discharge.See11 U.S.C. § 523(2006).Ultimately, the bankruptcy court approved a settlement between Finger and Reitman, and Reitman paid Finger $40,700.Finger paid $23,500 to Ray for attorney's fees and expenses.After paying her lawyer, Finger collected a net amount of $17,200 from the bankruptcy settlement in satisfaction of her state court judgment against Reitman.

A Malpractice Lawsuit

Finger then sued Ray for legal malpractice, breach of fiduciary duty, and breach of contract.Finger alleged that Ray (1) failed to file a Section 523 action to except her claim from Reitman's discharge, (2) failed to disclose that he had not filed a Section 523 action, (3) falsely represented to Finger that he filed a Section 523 action instead of a Section 727 action, and (4) billed and collected excessive and unreasonable fees.Finger later amended her petition to add a cause of action for DTPA violations.Finger sought a refund of the attorney's fees and expenses that she had paid to Ray, and $225,000 in mental anguish damages.

Ray moved for a traditional and a no-evidence summary judgment on all of Finger's claims, contending that Ray properly pursued a Section 727 action to collect Finger's judgment, and that his work obtained successful results.Thus, according to Ray, Finger could not meet the "suit within a suit" causation requirement to recover damages for her claims.Finger could not establish that, but for Ray's conduct, she would have obtained a better net result in the underlying suit.He also denied any misrepresentation and contended that Finger had failed to allege a serious breach of fiduciary duty that would require Ray to forfeit the fees he had charged her.In the no-evidence summary judgment motion, Ray challenged each elementof Finger's claims, including causation and damages.

In response, Finger amended her petition to drop her claims for legal malpractice and breach of contract and to proceed on her breach of fiduciary duty, DTPA, and fee forfeiture claims.In Finger's summary judgment response, she contended that whether she could have prevailed in a section 523 action is irrelevant to her claims, because Ray falsely represented to Finger that he would file a section 523 action, not a section 727 one, and Finger paid $23,500 in attorney's fees on the basis of this representation.Finger contended that these claims did not require her to prove "suit within a suit" causation, and she therefore did not need expert testimony to establish liability or causation.

Finger attached her affidavit and excerpts from her deposition testimony as summary judgment evidence.She averred that she had hired Ray based on his express representations that (1)he would pursue state court collection methods, (2) her judgment against Reitman was based upon fraud, (3) Ray would file an action to except Finger's claim out of Reitman's bankruptcy proceeding, and (4) Ray would proceed with collection outside of the bankruptcy proceeding.Finger further averred that but for these representations, she never would have hired Ray, but would have instead "simply filed [her] claim with the bankruptcy court and negotiated with Mr. Reitman on the settlement that [she] knew he would make, based upon conversations with him."Finger finally stated that, although she obtained a settlement with Reitman for $40,700, she would have been able to obtain the same settlement without having to pay $23,500 in attorney's fees, and thus Ray's services had no value to her.Finger did not offer an affidavit or testimony from a licensed attorney to support her claims.

The trial court granted summary judgment on Finger's DTPA claim and her breach of fiduciary duty claim for actual damages, and denied summary judgment on the breach of fiduciary duty claim to the extent that Finger sought equitable fee forfeiture.In the summary judgment order, the trial court observed that Finger lacked the necessary expert testimony to establish causation because "[a]ll of Plaintiff's claims ... are essentially claims that but for the alleged misrepresentations by Defendants about proceeding under section 523 as opposed to section 727 of the bankruptcy code, Plaintiff would have simply filed a claim in the bankruptcy court and settled her claim with the bankrupt debtor or otherwise recovered more than she netted based upon Defendant's efforts."The trial court stated that Finger required a bankruptcy law expert to create a fact issue "on her ability to have, at a minimum, collected more than what she netted in this case had she done as she claims she could have and merely 'filed a claim.' "

After the trial court's rulings, Finger non-suited her claim for fee forfeiture and appealed the trial court's grant of summary judgment.

Discussion

Standard of Review

We review de novo the trial court's ruling on a motion for summary judgment.Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding,289 S.W.3d 844, 848(Tex.2009).In a traditional motion for summary judgment, the movant must establish that no genuine issue of material fact exists and the party is entitled to judgment as a matter of law.Tex.R. Civ. P. 166a(c).A party may move for no-evidence summary judgment on the ground that no evidence exists of one or moreessential elements of a claim on which the adverse party bears the burden of proof at trial.Tex.R. Civ. P. 166a(i).The trial court must grant a no-evidence summary judgment motion unless the non-movant produces competent summary judgment evidence that raises a genuine issue of material fact.Id.To determine if the non-movant raises a fact issue, we review the evidence in the light most favorable to the non-movant, crediting favorable evidence if reasonable jurors could do so, and disregarding contrary evidence unless reasonable jurors could not.SeeFielding,289 S.W.3d at 848(citingCity of Keller v. Wilson,168 S.W.3d 802, 827(Tex.2005)).We must review all of the summary judgment grounds on which the trial court ruled that are dispositive of the appeal, and we may consider any other grounds on which the trial court did not rule.SeeBaker Hughes, Inc. v. Keco R. & D., Inc.,12 S.W.3d 1, 5(Tex.1999)(citingCincinnati Life Ins. Co. v. Cates,927 S.W.2d 623, 624(Tex.1996)).

Summary Judgment Objections

Before addressing the merits, we review Finger's appellate challenges to the trial court's rulings on Ray's objections to statements in Finger's affidavit.The trial court sustained four of Ray's five objections.Finger challenges only two of these adverse rulings on appeal.First, Ray objected to Finger's assertion that,...