Green v. McKay

• Decision Date: 17 September 2012
• Docket Number: No. 05–10–01109–CV.,05–10–01109–CV.
• Citation: 376 S.W.3d 891
• Parties: Robert J. GREEN and Marilyn Green, Appellants, v. Joe McKAY, Appellee.
• Court: Texas Court of Appeals

376 S.W.3d 891

Robert J. GREEN and Marilyn Green, Appellants,

v.Joe McKAY, Appellee.

No. 05–10–01109–CV.

Court of Appeals of Texas,

Dallas.

Aug. 2, 2012.

Rehearing Overruled Sept. 17, 2012.

Steven G. Palmer, Jeffrey Robert Sandberg, Palmer and Manuel, L.L.P., Dallas, TX, for Appellants.

Robert F. Begert, Jennifer A. King, Burford & Ryburn, L.L.P., Dallas, TX, for Appellee.

Before Justices MORRIS, FILLMORE, and MYERS.

OPINION

Opinion By Justice FILLMORE.

Appellants Robert J. Green and Marilyn Green appeal the summary judgment granted in their legal malpractice case in favor of appellee Joe McKay. Appellants raise eight issues on appeal. In their first two issues, appellants contend the trial court erred by overruling their objections to unpleaded summary judgment grounds and summary judgment evidence. In their remaining issues, appellants contend the trial court erred in granting summary judgment because: McKay failed to establish, as a matter of law, appellants' “inability to come forward with causation evidence”; appellants' expert's report contains evidence of McKay's negligence, gross negligence, malice, and appellants' damages; a motion for new trial in the litigation underlying the legal malpractice lawsuit was unavailable to appellants as a result of following McKay's legal advice; McKay failed to establish, as a matter of law, appellants' “inability to come forward with damage evidence”; with regard to appellants' claims of gross negligence and malice, there is an issue of material fact whether McKay knew of the litigation underlying the legal malpractice lawsuit; and the default judgment rendered against appellants in the litigation underlying the legal malpractice lawsuit establishes appellants' damages. We affirm the trial court's judgment.

Procedural Background

This legal malpractice action was brought by appellants against McKay after a default judgment was rendered in favor of the City of Dallas in the underlying litigation brought by the City against appellants. Appellants asserted claims against McKay for legal malpractice/negligence, breach of contract, and gross negligence, and they asserted McKay acted with malice. Appellants allege McKay failed to advise appellants to file an answer to the City's lawsuit, that they had a right to set aside the judgment in favor of the City within a certain time period after the default judgment was rendered, and to seek the help of another attorney. Appellants allege McKay's acts or omissions that constitute gross negligence occurred while McKay held a specific intent to cause substantial injury or harm to appellants.

McKay filed a no-evidence motion for summary judgment, contending there was no evidence of causation, damages, breach of contract, gross negligence, or malice. SeeTex.R. Civ. P. 166a(i). McKay also filed a traditional motion for summary judgment, asserting appellants could not raise a material issue of fact that any act of McKay caused appellants injury or damages or constituted gross negligence or malice.¹SeeTex.R. Civ. P. 166a(c).

Appellants filed a response to the motions for summary judgment, objections to certain of McKay's summary judgment evidence, and objections to purportedly “unpleaded grounds” for summary judgment. Without stating the basis, the trial court granted McKay's motion for summary judgment. Appellants filed a motion for new trial. The trial court denied appellants' motion for new trial and overruled appellants' objections to McKay's summary judgment evidence and to McKay's “unpleaded grounds” for summary judgment. Appellants filed this appeal.

Factual Background²

In October 2000, appellants sold two parcels of real property (the Properties) to Burdle Hill and Shawn Edwards. By warranty deed with vendor's lien, appellants entered into an executory contract, whereby Hill and Edwards agreed to purchase the Properties and appellants retained a vendor's lien. The warranty deed was recorded in the real property records of Dallas County. To secure payment of the purchase price for the Properties, Hill and Edwards executed a deed of trust.

In June 2003, Hill filed for voluntary Chapter 13 bankruptcy. Appellants were identified in the bankruptcy proceeding as secured creditors of Hill. Appellants did not appear in Hill's bankruptcy proceeding. In May 2004, Hill's Chapter 13 plan was confirmed. The treatment of the Properties in the Chapter 13 Plan was “surrender for value” to appellants.

In November 2004, the City filed the underlying litigation against Hill and Edwards, City of Dallas v. Hill, Cause No. 04–11301, 134th Judicial District Court, Dallas County, Texas, asserting numerous violations of the Dallas City Code and ordinances on the Properties (the code violations lawsuit). Appellants were not named as defendants when the code violations lawsuit was filed. In October 2005, after the Properties were surrendered to appellants in Hill's bankruptcy, the City filed an amended petition naming appellants as defendants and alleging appellants were the current owners of the Properties. Appellants were served with citations in the code violations lawsuit in December 2005.³ In 2005 and 2006, notices were served on appellants in the code violations lawsuit. Appellants did not file an answer to the lawsuit. The City moved for default judgment against appellants on January 4, 2007. Appellants were served with the City's motion for default judgment.

In February and March 2006, Dallas County and other taxing authorities filed two lawsuits against appellants and others in rem for delinquent ad valorem taxes on the Properties in County of Dallas v. Burdle Seperal Hill, Cause No. TX–06–30168, 101st Judicial District Court, Dallas County, Texas, and County of Dallas v. Burdle Seperal Hill, Cause No. TX–06–30506, 134th Judicial District Court, Dallas County, Texas. These tax lawsuits were consolidated (the tax lawsuit). Appellants did not file an answer in the tax lawsuit. On April 11, 2007, a default judgment was signed in favor of the taxing authorities in the tax lawsuit,⁴ and judgment liens were filed on the Properties.⁵

On January 30, 2007, Robert Green, a building inspector employed by Dallas County, went to the office of attorney McKay. According to Robert, appellants received notices of hearings in the code violations lawsuit, including the hearing on the City's motion for default judgment against appellants. His wife, Marilyn, told Robert he needed “to go see about this,” which prompted him “on behalf of his wife and himself” to see McKay. Before speaking with McKay, Robert completed a prospective client form. On that form, Robert indicated the type of case was “Tax foreclosure on real property + ownership/transfer of title.”

Robert testified in his deposition that he brought to his January 30 meeting with McKay the City's amended complaint in the code violations lawsuit naming appellants as defendants, the Motion for Default Judgment in the code violations lawsuit that stated appellants owned the Properties, the bankruptcy documents whereby Hill surrendered the Properties to the secured-creditor appellants, and documents regarding the tax lawsuit. According to Robert, “when all of this started,” appellants were not the owners of the Properties and there was no liability. Robert testified appellants sold the Properties to Hill and carried a note on the debt, and Hill thereafter filed bankruptcy. Robert had seen Hill's Final Chapter 13 Plan in bankruptcy, and the bankruptcy papers Robert had in his possession indicated he was a lienholder on the Properties. It was claimed in the bankruptcy that Hill had “given [appellants] the property back”; Hill was “supposedly turning the property over” to appellants as lienholders. The City amended its code violations lawsuit pleadings naming appellants as owners of the Properties and as defendants in the lawsuit, and it appeared to Robert that he could have personal liability. Robert indicated he went to McKay's office to speak with him about the tax lawsuit and the transferring of the title to the Properties back to appellants, which resulted in their being named as defendants in the code violations lawsuit.

Appellants did not file an answer in the code violations lawsuit. According to Robert, McKay failed to advise Robert to file an answer in the code violations lawsuit. Robert testified McKay told him he did not have to do anything and “it would go away.” Robert did not expect McKay to do anything for appellants after the January 30 meeting. Robert paid McKay $40.00 for the consultation.

On March 30, 2007, the trial court conducted a hearing in the code violations lawsuit on the City's Motion for Default Judgment against appellants.⁶ Appellants did not appear at the hearing. On April 17, 2007, the trial court rendered judgment against appellants as owners of the Properties, awarding the City $562,275 in civil penalties.⁷ The judgment states appellants were properly served with notice of the code violations lawsuit in December 2005, were provided a copy of the City's Motion for Default Judgment against them on January 4, 2007, and were properly served with notice of the March 30, 2007 hearing on February 13, 2007.

McKay and Robert had no further contact until sometime after the final judgment was signed in the code violations lawsuit. According to Robert, he went to McKay's office the day he received the judgment or shortly thereafter. He gave a copy of the final judgment in the code violations lawsuit to a “staff person” in McKay's office. That staff person then took the judgment to another area in the office. Approximately five minutes later, the staff person returned with the judgment and told Robert that McKay could not help him.

Causation

In his motion for traditional summary judgment, McKay asserted appellants could not raise a fact issue that any act by McKay caused them injury, that they suffered damages, or that McKay was grossly negligent or acted with malice. McKay...