Stephen Kemp and Elliot Kemp v. Paul Jensen John Saringer And Wagstaff, Alvis, Stubbeman, Seamster & Longacre, L.L.P.

Citation: Not availableDocket: 11-09-00052-CV

Court: Court of Appeals of Texas; December 1, 2010; Texas; State Appellate Court

Original Court Document: View Document

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On December 2, 2010, the Eleventh Court of Appeals filed an opinion affirming a trial court's decision in a legal malpractice suit brought by Stephen and Elliot Kemp against attorneys Paul Jensen, John Saringer, and the law firm Wagstaff, Alvis, Stubbeman, Seamster, Longacre, L.L.P. The Kemps alleged negligence and breach of fiduciary duty after the attorneys obtained a default judgment against Subsurface Exploration Company, which was later set aside when it was revealed that the wrong entity was sued. 

The Kemps, who owned property with mineral leases, had assigned claims related to surface damage to Stephen Kemp, who initially retained Jensen for the case. After Jensen withdrew, Saringer took over and subsequently pursued a default judgment. However, the trial court found that the attorneys had not been negligent based on a jury verdict that absolved the defendant, leading to the Kemps’ malpractice claim being dismissed on summary judgment.

The court's ruling was based on the requirement that the Kemps must prove proximate cause by demonstrating that they would have prevailed in the underlying case but for the attorneys' actions. The Kemps challenged the trial court's judgment on two grounds: the jury's verdict should not bar their malpractice claim, and there were unresolved material facts. The appellate court reviewed the summary judgment under a de novo standard, ultimately affirming the trial court's decision.

A plaintiff must demonstrate the legal significance of an attorney's failure and its impact on the underlying case, which typically requires expert testimony. In this case, the attorneys acknowledged their duty to the Kemps but claimed the Kemps did not suffer harm, as the jury found Gassiot not negligent. The Kemps countered that the jury's finding pertained only to negligence occurring within a specified limitations period, not a general finding of no negligence. The jury charge instructed them to not assess damages for actions prior to July 16, 2001, which the Kemps argue limited the jury's consideration to post-July 16 activities when assessing negligence.

The interpretation of the jury's charge does not reveal an intention to restrict the jury's negligence assessment but rather to limit damage quantification. The term "assess" implies determining damages, but does not indicate the jury was restricted in evaluating negligence itself. The Kemps further contend that the jury verdict should not be seen as definitive due to the attorneys' negligence in excluding evidence, which they claim affected the trial's outcome. Affidavits from Stephen Kemp and another witness indicated that the court excluded evidence of damages prior to the cutoff date, but neither affidavit detailed the specific evidence that was barred or the evidence that was admitted but not considered due to the charge. The absence of a trial transcript leaves uncertainty regarding what evidence the jury would have reviewed had the original lawsuit named Gassiot instead of Subsurface Exploration.

The Kemps failed to demonstrate how the exclusion of evidence impacted the outcome of their case. In a similar precedent, Cantu, the plaintiffs did not provide necessary medical expert testimony to support their claim of legal malpractice, leading the court to affirm a summary judgment in favor of the attorney. The Kemps' legal expert, Robin M. Green, primarily addressed breaches of duty but lacked knowledge of the specific evidence excluded, rendering his testimony on proximate cause inadequate. His assumption that the exclusion affected the jury's verdict does not equate to proving that it would have led to a different outcome. Additionally, Saringer’s affidavit suggested that allowing evidence related to Valera Oil would have improved the Kemps' chances for a favorable verdict; however, without substantiation or explanation, this amounts to mere speculation. The burden of proof required the Kemps to show that a favorable verdict was more likely than not achievable with the excluded evidence, which they did not satisfy. Ultimately, the jury found no negligence, indicating that the attorneys' alleged negligence was not the proximate cause of the Kemps' damages.

The Kemps initiated a collateral challenge against their attorneys, asserting that the attorneys' breach of duty led to the exclusion of critical damage evidence in their trial. However, they failed to identify the specific evidence that was excluded, explain its significance, or demonstrate how its exclusion would have altered the jury's verdict. As a result, the trial court found no grounds to overturn the jury's decision and correctly granted summary judgment in favor of the attorneys, dismissing the Kemps' negligence claims.

Additionally, the Kemps alleged a breach of fiduciary duty against Jensen for not disclosing that he had sued the wrong entity. Jensen countered with a successful summary judgment motion, arguing that the Kemps were improperly attempting to split a negligence claim. The Kemps contended that the trial court made an error by lacking evidence for its decision and cited a precedent (Willis v. Maverick) regarding an attorney's duty to disclose material facts. 

The text distinguishes between professional negligence, which arises from improper representation or lack of care, and breach of fiduciary duty, which pertains to an attorney's integrity and self-interest. It notes that professional negligence cannot be recast as claims of fraud, breach of contract, or breach of fiduciary duty. Texas courts have consistently ruled that failures to disclose important information are classified as professional negligence, not breaches of fiduciary duty, unless there is evidence of improper benefit to the attorney from the representation. The excerpt cites multiple cases reinforcing this distinction and clarifying that allegations regarding misrepresentations by an attorney do not automatically constitute a breach of fiduciary duty.

In the case of Kimleco Petroleum, Inc. v. Morrison, Shelton, the court ruled that the claim against attorney Paul Jensen, alleging he misled clients about the readiness of their case for trial, constituted legal malpractice rather than breach of fiduciary duty. While the plaintiffs' claims bore resemblances to the case Latham v. Castillo, which involved affirmative misrepresentation by an attorney, the Kemps did not allege Jensen received any improper benefit. Instead, their assertions centered on Jensen’s failure to communicate essential information about their case, which is categorized as professional negligence. The court emphasized that Jensen's duty to keep clients informed is a critical aspect of his professional responsibilities, and any violation of this duty amounts to professional negligence, not breach of fiduciary duty. Consequently, the trial court's decision to grant Jensen's motion for summary judgment regarding the breach of fiduciary duty claim was upheld, as was the dismissal of the Kemps’ claim against John Saringer for failing to advise them of a potential Deceptive Trade Practices Act (DTPA) claim against Jensen. In a dissenting opinion, it was argued that the burden of proof was improperly placed on the Kemps and that the summary judgments should be reversed and remanded for trial, stressing the standards for traditional motions for summary judgment and the need for a thorough review of the evidence.

In Goodyear Tire & Rubber Co. v. Mayes, the Texas Supreme Court established the standard for evaluating motions for traditional summary judgment. The appellate court must view the evidence favorably for the nonmovant and assess whether the movant has demonstrated that no genuine issues of material fact exist, thereby justifying judgment as a matter of law. In a no-evidence summary judgment, the burden lies with the nonmovant to present sufficient evidence to create a genuine issue of material fact; however, in traditional summary judgment scenarios, the movant must conclusively prove defenses or disprove elements of the nonmovant's claims before the burden shifts to the nonmovant. The Kemps, as nonmovants, are not required to present evidence unless the appellees first establish their entitlement to summary judgment. The Kemps must ultimately prove legal duty, breach, proximate causation, and damages in their negligence claims. The appellees’ reliance on the jury verdict was insufficient to conclusively disprove the proximate cause element of the Kemps’ claim, as the verdict merely indicated that the Kemps lost. Thus, the appellate court must evaluate the evidence in favor of the Kemps, maintaining that the appellees did not meet their burden to warrant summary judgment.

The jury instruction that limited damages to those occurring before July 16, 2001, was improperly included in the negligence issue, potentially leading to a jury verdict that Subsurface Exploration was not negligent. Although most damages happened before that date, it is reasonable to infer that the jury could have found Subsurface negligent had the time constraints not been imposed. Therefore, the Kemps did not conclusively disprove an element of their negligence claim. The Kemps were not required to present evidence in response to traditional summary judgment motions. They pointed out that the appellee Saringer was negligent for not preserving their claims against Jensen under the Deceptive Trade Practices Act, a claim not addressed in the summary judgment motions. The trial court erred in granting summary judgment on the negligence cause of action. Regarding the breach of fiduciary duty claims, the Kemps did not need to provide evidence unless appellees conclusively negated an element of the claim. Breach of fiduciary duty focuses on whether an attorney obtained improper benefits, while professional negligence concerns improper representation. The Kemps’ claims included negligence related to failing to sue the correct entity and a breach of fiduciary duty regarding Jensen's failure to disclose reasons for withdrawing from the case. The distinction between negligent conduct and deceptive conduct must be recognized, as conflating the two undermines the nature of the claims. The dissent recommends granting a rehearing on the breach of fiduciary duty claim and allowing the Kemps the opportunity to amend their petition.