Affirmed in Part, Reversed and Remanded in Part, and Majority Opinion and
Concurring and Dissenting Opinion filed May 9, 2013.
In The
Fourteenth Court of Appeals
NO. 14-11-01116-CV
RICHARD ALAN HAASE, Appellant
V.
ABRAHAM, WATKINS, NICHOLS, SORRELS, AGOSTO AND FRIEND,
LLP, Appellee
On Appeal from the 80th District Court
Harris County, Texas
Trial Court Cause No. 2011-17970
OPINION
Richard Alan Haase pursued three claims of professional negligence against
Abraham, Watkins, Nichols, Sorrels, Agosto and Friend, LLP (―Abraham
Watkins‖), a law firm that had previously represented him. Abraham Watkins
moved for summary judgment on the basis of limitations. The trial court granted
the summary judgment, and Haase now appeals. We affirm in part, and reverse and
remand in part.
BACKGROUND
This case arises from a federal patent litigation. In the underlying case,
Haase and his company, ClearValue, Inc., asserted an action against Pearl River
Polymers, Inc. and four other entities (collectively ―Pearl River‖) for alleged patent
infringement and misappropriation of trade secrets. According to Haase, Pearl
River manufactured chemicals for use in a water purification process, and certain
of these products had a viscosity similar to a formula Haase had developed for the
same purpose. Haase retained Gordon G. Waggett, a solo practitioner, as his patent
attorney. On Waggett‘s recommendation, Haase assembled a litigation team
headed by the Houston-based law firm of Abraham Watkins. Abraham Watkins
filed suit on behalf of Haase in January 2005, and remained as counsel of record
until August 28, 2006, when it withdrew from the case due to irreconcilable
differences.
More than a year before trial, Haase obtained samples of Pearl River‘s
products from a third party, and privately arranged for these products to be tested.
The results showed that the samples‘ viscosity was far below that of Haase‘s
patented formula. The testing was conducted at a time when Abraham Watkins was
still representing Haase; however, the parties dispute whether Abraham Watkins
was ever apprised of the testing. What is undisputed is that Haase never produced
the results to Pearl River during discovery. He shared the results instead with
Waggett and his retained expert, in violation of the federal court‘s order to provide
such evidence to opposing counsel.
In March 2007, Haase‘s case proceeded to trial under new counsel. Early
during the proceedings, the district court was informed of Haase‘s independent
2
testing and his failure to provide the results of that testing to Pearl River. Haase
told the court that although he had personally seen the test results, he was not
involved with the tests themselves and he did not know when the tests were
conducted. Haase stated his belief that such information was protected by the
attorney-client privilege. The court subsequently heard from Haase‘s testifying
expert, who revealed that he too had seen the test results, thereby eliminating his
claim of privilege. Haase then stated that he had not shared the test results with his
litigation team because, in his opinion, the results were ―irrelevant‖ to the case.
The district court ordered Haase to locate the test results and produce them to
opposing counsel. The court also informed the parties that it would consider ―any
motion for sanctions‖ the following morning.
Pearl River moved for sanctions the next day. During the hearing, Pearl
River indicated that it had sought, by interrogatories and requests for production,
any results of product testing in Haase‘s possession. No test results were ever
produced or listed on a privilege log. The district court was shown evidence of
emails between Haase, Waggett, and Haase‘s retained expert discussing the tests,
which contradicted Haase‘s previous representation that he had not shared the
results with his litigation team. The court stated that it was confronted with ―an
extremely troubling matter‖ because the test results had been withheld for over a
year and a half. The court determined that only the ―ultimate sanction‖ was
appropriate: it therefore struck Haase‘s pleadings and entered judgment in Pearl
River‘s favor. The court also imposed monetary sanctions against Haase and
Waggett in an amount exceeding $2.7 million. On June 28, 2007, the court issued
its formal sanctions decision. See ClearValue, Inc. v. Pearl River Polymers, Inc.,
242 F.R.D. 362 (E.D. Tex. June 28, 2007).
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On Haase‘s appeal of the sanctions, the federal appellate court affirmed in
part and reversed in part. The court agreed that Haase‘s failure to disclose the
results was performed willfully and in bad faith, and that this failure was supported
by the record. However, the court also held that under governing precedent,
Haase‘s conduct did not warrant death-penalty sanctions. On March 24, 2009, the
appellate court reversed the order striking Haase‘s pleadings, reduced the monetary
sanctions to $121,107.38, and remanded for an adjudication of Haase‘s claims. See
ClearValue, Inc. v. Pearl River Polymers, Inc., 560 F.3d 1291 (Fed. Cir. 2009).
On remand, a jury found in Haase‘s favor on his claims of misappropriation
of trade secrets and indirect patent infringement. The damages for
misappropriation were ultimately struck by the trial court. On November 2, 2010,
the court entered judgment on the infringement claim, awarding damages to Haase
in the amount of $2,172,617, together with prejudgment and postjudgment interest.
The court then reduced the damages by an amount equaling the previously
affirmed sanctions against Haase. See ClearValue, Inc. v. Pearl River Polymers,
Inc., 735 F. Supp. 2d 560 (E.D. Tex. 2010).
Both sides appealed the district court‘s judgment. On February 17, 2012, the
federal appellate court ruled in Pearl River‘s favor, concluding that Pearl River had
not misappropriated a trade secret and that Haase‘s patent was invalid. See
ClearValue, Inc. v. Pearl River Polymers, Inc., 668 F.3d 1340 (Fed. Cir. 2012).
On March 23, 2011, during the pendency of his second federal appeal, Haase
filed a pro se action in state court against Abraham Watkins, asserting three claims
of professional negligence, or ―legal malpractice,‖ as it is sometimes denominated.
Haase alleged first that Abraham Watkins was responsible for coordinating the
product testing and labeling the results as ―attorney-client work product.‖ Haase
contended that but for this labeling, he would not have been sanctioned by the
4
district court. Haase‘s second claim alleged that Abraham Watkins was negligent
in failing to join additional tortfeasors in the federal complaint. In his third claim,
Haase alleged that Abraham Watkins was negligent in failing to pursue a claim for
fraud against one of the named Pearl River defendants. Haase contended that these
latter two failures proximately caused his limited recovery. He also alleged two
separate causes of action for negligent misrepresentation and breach of contract.
Abraham Watkins generally denied the allegations and filed a motion for
summary judgment on traditional grounds. In its motion, Abraham Watkins
claimed that it was completely unaware of the product testing and that there was no
evidence to support a finding that it had knowledge of the testing. Abraham
Watkins also argued that Haase‘s claims for professional negligence were barred
by the two-year statute of limitations, and that his claims for negligent
misrepresentation and breach of contract were precluded by the rule against
fracturing a claim for professional negligence into separate causes of action. On
September 26, 2011, the trial court granted summary judgment in favor of
Abraham Watkins. Haase now appeals from that judgment.
APPELLATE JURISDICTION
Before discussing the merits of Haase‘s appeal, we first address a
jurisdictional challenge raised by Abraham Watkins. The argument here focuses on
the timeliness of Haase‘s notice of appeal.
In most cases, a notice of appeal must be filed within thirty days after the
date the judgment is signed. See Tex. R. App. P. 26.1(a); Sweed v. Nye, 323
S.W.3d 873, 875 (Tex. 2010) (per curiam) (holding that a timely filed notice of
appeal will invoke appellate jurisdiction, even if defective). If the notice of appeal
is untimely, the reviewing court lacks jurisdiction and must dismiss the case. See
Charette v. Fitzgerald, 213 S.W.3d 505, 509 (Tex. App.—Houston [14th Dist.]
5
2006, no pet.). The judgment here was signed on September 26, 2011. Haase filed
his notice of appeal on December 27, 2011. Abraham Watkins argues that because
that date falls more than ninety days after the date of summary judgment, this case
must be dismissed for want of jurisdiction.
Haase responds that his notice of appeal should not be considered untimely
because he did not receive notice of the trial court‘s judgment until December 27,
the date of his filing. By rule, the appellate timetables may be extended for this
reason:
If a party affected by a judgment or other appealable order has not—
within 20 days after the judgment or order was signed—either
received the notice required by Texas Rule of Civil Procedure 306a.3
or acquired actual knowledge of the signing, then a period that, under
these rules, runs from the signing will begin for that party on the
earlier of the date when the party receives notice or acquires actual
knowledge of the signing. But in no event may the periods begin more
than 90 days after the judgment order was signed.
Tex. R. App. P. 4.2(a)(1).
The procedure for invoking this extension is governed by Rule 306a(5) of
the Texas Rules of Civil Procedure. See Tex. R. App. P. 4.2(b); In re Gen. Motors
Corp., 296 S.W.3d 813, 820 (Tex. App.—Austin 2009, no pet.). Rule 306a(5)
requires ―the party adversely affected . . . to prove in the trial court, on sworn
motion and notice, the date on which the party or his attorney first received a
notice of the judgment or acquired actual knowledge of the signing.‖ Tex. R. Civ.
P. 306a(5); see Nedd-Johnson v. Wells Fargo Bank, N.A., 338 S.W.3d 612 (Tex.
App.—Dallas 2010, no pet.). A motion under this rule must be filed no later than
ninety days after the original judgment is signed. See Tex. R. Civ. P. 306a(4). As
the supreme court ruled in Levit v. Adams, ―notice received after the 90th day is
simply not covered by the Rule.‖ 850 S.W.2d 469, 470 (Tex. 1993) (per curiam).
6
Relying on Levit, Abraham Watkins argues that the appellate timetables
cannot be extended because Haase judicially admitted to receiving notice on
December 27, 2011, which was the ninety-second calendar day after the date the
judgment was signed. This argument fails to account for procedural rules
governing the computation of time. In both the trial and appellate context, if the
last day of a period prescribed by rule ends on a Saturday, Sunday, or legal
holiday, then the rules extend the period to the end of the next eligible day that is
not a Saturday, Sunday, or legal holiday. See Tex. R. App. P. 4.1(a); Tex. R. Civ.
P. 4. Although the supreme court did not discuss these rules in Levit, we do not
read that case to foreclose their application.
As mentioned previously, the trial court‘s summary judgment was signed on
September 26, 2011. The ninetieth calendar day after September 26 was Christmas
Sunday, December 25. Because this date fell on both a holiday and a weekend,
Haase could not have filed any motion with the court. The same was true for
Monday, December 26 because the day after Christmas is a legal holiday. See Tex.
Gov‘t Code § 662.003(b)(8). The next day that was not a Saturday, Sunday, or
legal holiday was Tuesday, December 27, 2011, the same date on which Haase
filed his notice of appeal and his motion pursuant to Rule 306a(5). Therefore,
Haase‘s motion for invoking the extension was timely. To avail himself of that
extension, Haase had to next ―prove in the trial court, on sworn motion‖ when he
first acquired notice. See Tex. R. Civ. P. 306a(5).
Haase supplemented his motion, and in his sworn affidavit, he attested that
he first received notice of the trial court‘s summary judgment on December 27.
The motion was submitted to the trial court, and upon consideration of the
pleadings, evidence, and arguments of counsel, the court issued findings of fact,
which determined that ―Haase first received notice or acquired actual knowledge of
7
this Court‘s final judgment . . . on December 27th, 2011.‖ With this affirmative
finding, the period for filing a notice of appeal would have begun ninety days after
the date the judgment was signed, representing the maximum extension allowed by
rule. See Tex. R. App. P. 4.2(a)(1). Haase filed his notice of appeal on the same
day as his Rule 306a(5) motion. Because that date necessarily falls within the
thirty-day period allowed after the ninety-day extension, we conclude that Haase
timely perfected his appeal. See Tex. R. App. P. 4.2; Tex. R. App. P. 26.1.
Accordingly, we are within our appellate jurisdiction to consider this case.
ANALYSIS
Haase presents six issues for review. We address only those issues
pertaining to the trial court‘s summary judgment.
A. Standard of Review
We review a trial court‘s summary judgment de novo. Ferguson v. Bldg.
Materials Corp. of Am., 295 S.W.3d 642, 644 (Tex. 2009) (per curiam); Tex. Mun.
Power Agency v. Pub. Util. Comm’n of Tex., 253 S.W.3d 184, 192 (Tex. 2007). To
prevail on a traditional motion for summary judgment, the movant must show that
there is no genuine issue of material fact and that he is entitled to judgment as a
matter of law. Tex. R. Civ. P. 166a(c); Mann Frankfort Stein & Lipp Advisors, Inc.
v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). A defendant who moves for
traditional summary judgment must conclusively negate at least one essential
element of each of the plaintiff‘s causes of action or conclusively establish each
element of an affirmative defense. Frost Nat’l Bank v. Fernandez, 315 S.W.3d
494, 508 (Tex. 2010). Evidence is conclusive only if reasonable minds could not
differ in their conclusions. City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex.
2005). Once the defendant establishes his right to summary judgment as a matter
of law, the burden shifts to the plaintiff to present evidence raising a genuine issue
8
of material fact. Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995).
The nonmovant has no burden to respond to a traditional motion for summary
judgment unless the movant conclusively establishes each element of his cause of
action or defense as a matter of law. Rhône-Poulenc, Inc. v. Steel, 997 S.W.2d 217,
222–23 (Tex. 1999).
Abraham Watkins moved for summary judgment in two parts. It first argued
that Haase‘s non-negligence claims were barred by the rule against fracturing. It
then argued that Haase‘s negligence claims were barred by the two-year statute of
limitations. We address both parts of this two-part argument in turn.
B. Fracturing
The rule against fracturing provides that a claimant for legal malpractice
may not opportunistically transform a claim sounding in negligence into separate
non-negligence causes of action. Deutsch v. Hoover, Bax & Slovacek, L.L.P., 97
S.W.3d 179, 189 (Tex. App.—Houston [14th Dist.] 2002, no pet.); Goffney v.
Rabson, 56 S.W.3d 186, 190 (Tex. App.—Houston [14th Dist.] 2001, pet. denied).
The rule does not mean that a client is limited to pursuing only negligence causes
of action. Other claims may still be advanced simultaneously, but the client must
do more than merely reassert the same claim for legal malpractice under an
alternative label. Duerr v. Brown, 262 S.W.3d 63, 70 (Tex. App.—Houston [14th
Dist.] 2008, no pet.).
When deciding whether an allegation states a claim for negligence or some
other cause of action, we are not bound by the parties‘ own characterization of the
pleadings. Beck v. Law Offices of Edwin J. (Ted) Terry, Jr., P.C., 284 S.W.3d 416,
427–28 (Tex. App.—Austin 2009, no pet.). Our analysis focuses primarily on
ascertaining whether the facts alleged implicate an attorney‘s duty of ordinary care
9
or some other independently actionable duty. Id. at 428. As this court has stated
previously,
If the gist of a client‘s complaint is that the attorney did not exercise
that degree of care, skill, or diligence as attorneys of ordinary skill and
knowledge commonly possess, then that complaint should be pursued
as a negligence claim, rather than some other claim. If, however, the
client‘s complaint is more appropriately classified as another claim,
for example, fraud, DTPA, breach of fiduciary duty, or breach of
contract, then the client can assert a claim other than negligence.
Deutsch, 97 S.W.3d at 189 (citations omitted). Our analysis may also be guided by
the remedy the plaintiff seeks. See Murphy v. Gruber, 241 S.W.3d 689, 698 (Tex.
App.—Dallas 2007, pet. denied).
In addition to his claim for professional negligence, Haase asserted separate
actions for negligent misrepresentation and breach of contract. According to the
petition, these claims were based solely on the alleged actions and omissions of
Randy Sorrels, a named partner at Abraham Watkins. The petition‘s failure to
elaborate on these claims forecloses pleading of a duty independent of a traditional
negligence claim.
For example, Haase averred in his petition that ―Plaintiff will show this
Honorable Court that within Malpractice Sorrels performed Negligent
Misrepresentation in that in the course of business with Plaintiff Sorrels provided
false information for the guidance of Plaintiff which lead [sic] to a pecuniary loss
to Plaintiff due to the justifiable reliance by Plaintiff of the false information‖
(emphasis added). The claim of false information referred to Sorrels‘s alleged
instruction to coordinate the product testing and then label the results as privileged.
These facts clearly relate to Haase‘s discovery sanctions and the core of his claim
for professional negligence. Indeed, Haase explicitly stated that these facts are
―within‖ his claim for professional negligence. We conclude that Haase‘s claim for
10
negligent misrepresentation is merely a relabeled claim for professional
negligence.
Haase‘s claim for breach of contract is similarly dependent on his claim for
professional negligence. In his petition, Haase avers that ―Plaintiff will show this
Honorable Court that Sorrels[‘s] Malpractice comprises Sorrels[‘s] not performing
as contracted.‖ The performance issue of which Haase complained was the alleged
failure to complete discovery and join another class of tortfeasors in his federal
complaint. Because this allegation is merely a restatement of his professional
negligence claim, Haase was precluded from asserting it as a separate cause of
action. Cf. Goffney, 56 S.W.3d at 191–92 (concluding that claim sounded in
negligence where attorney‘s failure to prepare and abandonment on the day of trial
constituted a breach of the duty to represent the client, rather than a breach of
contract).
C. Statute of Limitations—Sanctions Allegation
We conclude that Haase‘s only cause of action was for professional
negligence. The petition reflects that this cause of action was based on three
separate factual allegations. Those allegations stated that (1) Abraham Watkins
coordinated the product testing, which proximately resulted in Haase‘s sanctions;
(2) Abraham Watkins failed to complete discovery and failed to join additional
tortfeasors in the federal complaint, thereby limiting Haase‘s recovery; and
(3) Abraham Watkins failed to pursue an additional cause of action against one of
the named Pearl River defendants, which also limited Haase‘s recovery. We now
consider whether these claims were barred by the statute of limitations, beginning
with the sanctions allegation.
For allegations of professional negligence, the statute of limitations is two
years. See Apex Towing Co. v. Tolin, 41 S.W.3d 118, 120 (Tex. 2001). If the
11
running of limitations is asserted as a basis for summary judgment, the defendant
assumes the burden of proving when the cause of action accrued. See Tex. R. Civ.
P. 94; Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 566 (Tex.
2001); Burns v. Thomas, 786 S.W.2d 266, 268 (Tex. 1990). A cause of action for
legal malpractice accrues when the client sustains a legal injury or, in cases
governed by the discovery rule, when the client discovers or should have
discovered the facts establishing the elements of a cause of action. See Willis v.
Maverick, 760 S.W.2d 642, 643 (Tex. 1988); Smith v. McKinney, 792 S.W.2d 740,
742 (Tex. App.—Houston [14th Dist.] 1990, writ denied).
Abraham Watkins argues that limitations began to run, at the latest, on June
28, 2007. On that date, Haase sustained a legal injury when the federal court
imposed sanctions against him, which necessarily apprised him of any possible
breach of duty committed during the discovery process. Following this date of
accrual, limitations would have expired in 2009, making Haase‘s claim for
negligence time-barred because it was not filed until March 2011.
Haase counters that the statute of limitations should not bar his suit, citing
the Hughes tolling rule. In Hughes v. Mahaney & Higgins, the supreme court held
that ―when an attorney commits malpractice in the prosecution or defense of a
claim that results in litigation, the statute of limitations on the malpractice claim
against the attorney is tolled until all appeals on the underlying claim are
exhausted.‖ 821 S.W.2d 154, 157 (Tex. 1991); see also Apex Towing, 41 S.W.3d at
121–22 (clarifying that the Hughes tolling rule applies even in cases in which the
attorney‘s representation terminates after the negligent act, but before the end of
litigation); Underkofler v. Vanasek, 53 S.W.3d 343, 345–46 (Tex. 2001) (same).
The court expressed two policy reasons for this rule. The court first observed that
the legal injury rule and the discovery rule can force a client into the untenable
12
position of having to adopt inherently inconsistent litigation postures in the
underlying case and the malpractice case. See Hughes, 821 S.W.2d at 156 (noting
that a party might be placed in a position of asserting that her attorney committed
malpractice and, but for that malpractice, her claim would have succeeded, while at
the same time asserting in an underlying appeal that the attorney‘s actions were
correct, or at least not fatal to her claim). The court then explained that limitations
should be tolled for the malpractice claim because the viability of that claim
depends on the outcome of the underlying litigation. Id. at 157.
Two appeals were taken in the underlying federal litigation. Because the
sanctions issue was finally decided in the first, only that appeal is relevant to our
analysis. The opinion in that appeal was dated March 24, 2009. Because he filed
suit on March 23, 2011, just short of two years from the appeals court‘s decision,
Haase argues that his suit is timely and within the statute of limitations. We
disagree for the following reasons.
1. The Hughes tolling rule must be affirmatively pleaded.
Hughes does not expressly hold that a plaintiff must affirmatively plead the
tolling rule and the facts pertinent thereto before he may avoid the running of
limitations. However, based on analogous case law, we conclude that such facts
must be pleaded.
In Woods v. William M. Mercer, Inc., the supreme court determined that the
discovery rule was a plea in avoidance of the statute of limitations. 769 S.W.2d
515, 517 (Tex. 1988). A plea in avoidance ―is one which avows and confesses the
truth in the averments of fact in the petition, either expressly or by implication, but
then proceeds to allege new matter which tends to deprive the facts admitted of
their ordinary legal effect, or to obviate, neutralize, or avoid them.‖ Id. The
discovery rule fits this definition because, when affirmatively pleaded, it ―asserts
13
that while the statute of limitations may appear to have run, giving rise to that
appearance should not control.‖ Id. at 517–18.
The Hughes tolling rule functions much like the discovery rule because it
also operates to deprive the statute of limitations of its ordinary legal effect.
Limitations would normally begin to run on the date a legal injury is sustained, but
the Hughes tolling rule operates to toll the running of limitations until all
underlying appeals have been exhausted. Although the legal injury may appear to
have occurred prior to the appeal, the viability of the malpractice action cannot be
not known until the appeal is finally settled. See Hughes, 821 S.W.2d at 157
(―Limitations are tolled for the second cause of action because the viability of the
second cause of action depends on the outcome of the first.‖).
Consistent with Woods, we hold that the Hughes tolling rule, like the
discovery rule, is a plea in avoidance. Because Woods also holds that a plea in
avoidance must be affirmatively pleaded, we conclude that a malpractice claimant
must affirmatively plead the Hughes tolling rule, either in the original petition or in
an amended or supplemental petition, or else it is forfeited. See Tex. R. Civ. P. 94
(requiring the affirmative pleading of any matter ―constituting an avoidance or
affirmative defense‖); Woods, 769 S.W.2d at 518 (holding that the discovery rule
must be affirmatively pleaded); Hall v. Stephenson, 919 S.W.2d 454, 465 (Tex.
App.—Fort Worth 1996, writ denied) (stating that a plaintiff must affirmatively
plead the Hughes tolling rule); John H. Bauman, The Statute of Limitations for
Legal Malpractice in Texas, 44 Baylor L. Rev. 425, 447 (1992) (analogizing the
Hughes tolling rule with the discovery rule, and concluding that the Hughes tolling
rule must be affirmatively pleaded).
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2. Haase did not affirmatively plead the Hughes tolling rule in either
his original petition or his amended petition.
Haase argues that he did plead the Hughes tolling rule, citing three specific
paragraphs from his original petition. The paragraphs contain technical
descriptions of Haase‘s patent, along with damages alleged from the handling of
the underlying suit.1 The factual allegations do not discuss the timing of the
sanctions decision or the appeal that followed. We conclude that because the
paragraphs mainly just describe the nature of Haase‘s injury, they are insufficient
to invoke the Hughes tolling rule.
1
The paragraphs are replete with acronyms for scientific terms. They state the following:
As there are many SNF Distributors [defined in the underlying patent
litigation as the distributors and customers of one of the named Pearl River
defendants] serving thousands of water purification plants across the United
States, many of which would combine SNF HMW DADMAC and/or HMW Epi-
DMA with ACH in the clarification of water, it was important to Plaintiff and
ClearValue that Sorrels complete discovery with SNF to define which SNF
Distributors either misappropriated Plaintiff‘s Trade Secrets with SNF and/or
infringed the ‗690 Patent with SNF. Sorrels refused. Sorrels refused to pursue
discovery with SNF and/or to file a motion to compel against SNF.
***
To develop coagulants of the ‗690 Patent or ‗849 Application, SNF HMW
DADMAC and/or HMW Epi-DMA is blended with ACH in a ratio of about
0.5:0.5 to 0.99:0.05 HMW DADMAC and/or Epi-DMA:ACH with an average of
near 0.1:0.9. Therefore, including any reasonable profit and operating expense for
SNF Distributors, every $1 in HMW DADMAC and/or Epi-DMA represent about
near $20 in coagulant. Therefore, had Sorrels completed discovery, Plaintiff and
ClearValue could have timely included SNF Distributors the Federal Complaint
for damages of near $140,000,000 ($7,000,000 X 20).
Further, Plaintiff‘s ‗690 Patent and ‗849 Application require about on
average 10 pounds of coagulant to clarify 1,000,000 pounds of water, which has a
value in excess of $1,000 per million gallons = $120 per million pounds.
Therefore, each $1 of SNF HMW DADMAC and/or Epi-DMA, which converts to
near $20 in coagulant sales, also converts to near $400 in clarified water @ $0.60
per pound of SNF Distributor coagulant. Therefore, had Sorrels completed
discovery, Plaintiff and ClearValue could have included Customers of SNF
Distributors in the Federal Complaint for damages in excess of $1 billion
($7,000,000 X 20 X 20).
15
Haase filed an amended petition after receiving an answer from Abraham
Watkins. In its answer, Abraham Watkins plainly asserted the defense of
limitations, which notified Haase that the issue would be litigated. Haase did not
respond to the limitations issue in his amended petition, however. Indeed, he
makes no argument that the amended petition raises a plea in avoidance.
3. Haase did not assert the Hughes tolling rule in the summary
judgment record.
Failing to plead the Hughes tolling rule is not always fatal, however. An
unpleaded plea in avoidance may still serve to preclude summary judgment if it is
raised in a summary judgment response and if the opposing party fails to object to
it in a reply or before the rendition of judgment. See Roark v. Stallworth Oil &
Gas, Inc., 813 S.W.2d 492, 494 (Tex. 1991) (concluding that movant could assert
an unpleaded affirmative defense of lack of consideration, where nonmovant failed
to object to the late assertion in his written response); Proctor v. White, 172
S.W.3d 649, 652 (Tex. App.—Eastland 2005, no pet.) (reversing summary
judgment based on nonmovant‘s unpleaded assertion of the discovery rule in his
summary judgment response, where movants failed to object to late assertion
before the rendition of judgment). We now examine the summary judgment record
to determine if Haase timely asserted the Hughes tolling rule in his response.
Haase filed two responses to the motion for summary judgment. In his initial
response, he dedicated just a single paragraph to the limitations issue. His
argument was as follows:
Non-movant presents to this Honorable Court that Movant is
incorrect. Specifically, (i) Non-movant was not even aware of the
Federal Rules of Civil Procedure nor had Non-movant been
sanctioned for the legal error of Sorrels until the first judgment . . . on
November 29, 2007; after which, Non-movant appealed to the Court
of Appeals for the Federal Circuit; and after which, on March 24,
16
2009 the Court of Appeals for the Federal Circuit Ruled; (ii) Non-
movant had no recoverable damages related to the lack of discovery
performed by Movant until Final Judgment . . . was entered on August
12, 2010; and (iii) given events, Non-movant lost all rights of his
claim until obtaining Final Judgments . . . and did not regain any of
his rights of claim until the Ruling of the Federal Court of Appeals on
March 24, 2009. ―For the purposes of application of limitations
statute, a cause of action accrues when facts come into existence
authorizing a claimant to seek a judicial remedy, and the aggrieved
party knows or should know of the existence of these facts.‖ Further,
the statute of limitations clock begins ticking ―when the plaintiff first
becomes entitled to sue the defendant based upon a legal wrong
attributed to the latter.‖ Therefore, it was not until the Ruling of the
Court of Appeals for the Federal Circuit that Non-movant was
authorized and entitled to seek a judicial remedy. And, the Ruling of
the Court of Appeals for the Federal Circuit did not occur until March
24, 2009. While, the statute of limitations is two (2) years. And while,
Non-movant filed his Original Petition on March 23, 2011.
(footnotes omitted).
The argument in this paragraph is not entirely clear. Aspects of the
paragraph seem to conflate the discovery rule with the general accrual rule: Haase
recognizes that a cause of action accrues (under the discovery rule) when a party
―knows or should know of the existence‖ of facts giving rise to a legal remedy;
but, he also argues—incorrectly—that he was not ―authorized and entitled‖ to seek
a judicial remedy (under the general accrual rule) until his federal appeal was
exhausted.2 Neither statement is a correct application of Hughes. The Hughes
decision establishes a procedure for tolling the statute of limitations after a claim
has accrued—not, as Haase appears to assert, a basis for determining when the tort
2
Haase‘s references to the general accrual rule—i.e., ―when facts come into existence
authorizing a claimant to seek a judicial remedy‖ and ―when the plaintiff first becomes entitled
to sue‖—show that Haase‘s claim accrued when he was sanctioned on June 28, 2007. See
Hughes, 821 S.W.2d at 156 (―A cause of action for legal malpractice accrues when the client
sustains a legal injury‖).
17
is completed. We cannot say that Haase‘s response is sufficiently specific to raise
the Hughes tolling rule. Haase did not cite Hughes in his response, and he used no
language to argue that the statute of limitations should be ―tolled.‖ See McConnell
v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex. 1993) (―[I]ssues a non-
movant contends avoid the movant‘s entitlement to summary judgment must be
expressly presented by written answer to the motion or by other written response to
the motion and are not expressly presented by mere reference to summary
judgment evidence.‖).
In its reply to Haase‘s response, Abraham Watkins criticized Haase‘s
―awkward effort‖ to ―quasi-assert‖ the discovery rule. Noting that Haase had not
pleaded the discovery rule, Abraham Watkins formally objected to trying that issue
by consent. See Via Net v. TIG Ins. Co., 211 S.W.3d 310, 313 (Tex. 2006) (per
curiam) (holding that when a nonmovant‘s unpleaded plea in avoidance is asserted
for the first time in a summary judgment response, the movant may either object
that the plea in avoidance had not been pleaded, or respond on the merits and try
the issue by consent). Abraham Watkins did not mention the Hughes tolling rule in
its reply, apparently in the belief that it had not been raised.
In the second response, his sur-reply, Haase made his first unequivocal
assertion of the Hughes tolling rule.3 He quoted the rule verbatim, included an
appropriate citation to another supreme court case that repeated the rule, and in a
3
Our dissenting colleague contends that Haase‘s first response did raise the Hughes
tolling rule, but the parties‘ subsequent behavior shows otherwise. Abraham Watkins objected to
Haase‘s invocation of the discovery rule in his first response because he had not pleaded that
rule. There is no indication that Abraham Watkins interpreted Haase‘s response as raising the
Hughes tolling rule, which Haase also had not pleaded. Moreover, Haase‘s second response
shows that he knew how to raise the Hughes tolling rule expressly, confirming that he did not do
so in his first response. If we nevertheless interpreted Haase‘s first response to raise the Hughes
tolling rule, as the dissent does, we would unfairly deprive Abraham Watkins of a reasonable
opportunity to avoid trying that unpleaded theory by consent.
18
neatly focused paragraph, argued that his ―claims are tolled.‖ Abraham Watkins
filed no objection to this late assertion of the Hughes tolling rule. Ordinarily, the
failure to object to an unpleaded tolling provision will result in the parties‘ trying
that issue by consent. See Proctor, 172 S.W.3d at 652. In this case, however,
Haase‘s assertion was too late to be included in the summary judgment record.
Rule 166a provides, ―Except on leave of court, the adverse party [to a
motion for summary judgment], not later than seven days prior to the day of
hearing may file and serve opposing affidavits or other written response.‖ Tex. R.
Civ. P. 166a(c). Abraham Watkins moved for summary judgment on June 29,
2011, and set a date for submission on July 25, 2011, at 9:00 a.m. Haase filed his
first response on July 18, 2011, within the deadlines prescribed by rule. His sur-
reply, however, was filed the morning of July 25, thirteen minutes before the
motion was set for submission. Our record does not reflect that Haase requested
leave of court to file his sur-reply on the day of submission, and the recitals from
the final order do not indicate that the trial court considered the sur-reply when
ruling on the motion for summary judgment. Although judgment was not granted
until September 2011, we must presume under these facts that Haase did not have
leave of court to file his sur-reply.4 See Benchmark Bank v. Crowder, 919 S.W.2d
657, 663 (Tex. 1996) (presuming that affidavit was not properly before the trial
court where affidavit was filed two days before the summary judgment hearing);
INA of Tex. v. Bryant, 686 S.W.2d 614, 615 (Tex. 1985); Frankoff v. Norman, No.
14-11-00152-CV, 2012 WL 2394050, at *7 (Tex. App.—Houston [14th Dist.] June
4
―Rule 166a does not specify when the movant‘s reply to the nonmovant‘s response
should be filed.‖ David Hittner & Lynne Liberato, Summary Judgments in Texas, 46 Hous. L.
Rev. 1379, 1407 (2010). Local rules dictate that all responses ―shall be filed at least two working
days before the date of submission, except on leave of court.‖ See Harris County Civil Trial
Division Rule 3.3.3, available at http://www.justex.net/courts/civil/LocalRules.aspx. Abraham
Watkins filed its reply more than two days before the date of submission, though less than seven.
Unlike Haase, it was not required to obtain leave of court to file the reply.
19
26, 2012, no pet.) (mem. op.) (applying Benchmark Bank where summary
judgment motion was considered on submission, rather than by hearing).
Therefore, the sur-reply, and the Hughes tolling rule pleaded within it, may not be
considered part of the summary judgment record. See Envtl. Procedures, Inc. v.
Guidry, 282 S.W.3d 602, 612 (Tex. App.—Houston [14th Dist.] 2009, pet. denied).
4. The cause of action for the sanctions allegation is time-barred.
Haase‘s first response to the motion for summary judgment was ineffective
to raise the Hughes tolling rule, and his sur-reply cannot be considered for
summary judgment purposes. Because no applicable tolling provision was
otherwise asserted in the pleadings, the timeliness of Haase‘s petition must be
adjudged solely from the date his cause of action accrued.
The summary judgment evidence showed that Haase was sanctioned on June
28, 2007, for discovery abuse relating to his independent testing of Pearl River‘s
products. Because Haase sustained his legal injury no later than that date, any
cause of action based thereon had to be filed no later than June 29, 2009. Haase
filed his petition on March 23, 2011, outside the two-year statute of limitations.
Abraham Watkins was accordingly entitled to summary judgment as to this claim.
D. Statute of Limitations—Remaining Allegations
Haase‘s two remaining allegations contend that Abraham Watkins was
negligent by failing to sue additional tortfeasors and by failing to pursue an
additional cause of action against one of the Pearl River defendants. Because these
allegations complain of unawarded damages at the conclusion of litigation, they
represent distinct legal injuries apart from those sustained when the district court
imposed sanctions. Accordingly, the causes of action for these two remaining
20
allegations may have accrued on a different date. As the movant below, Abraham
Watkins assumed the burden of establishing the date of their accrual.
The supreme court has held that ―a cause of action accrues when a wrongful
act causes some legal injury, even if the fact of injury is not discovered until later,
and even if all resulting damages have not yet occurred. See Murphy v. Campbell,
964 S.W.2d 265, 270 (Tex. 1997) (citing S.V. v. R.V., 933 S.W.2d 1, 4 (Tex.
1996)). In its motion, Abraham Watkins argued that these causes of action accrued
no later than August 28, 2006, when it withdrew from the case due to
irreconcilable differences. The date of withdrawal is significant in one respect: it
represents the last possible time in which Abraham Watkins could have committed
a wrongful act during the course of the litigation. However, to prove that a cause of
action has accrued, Abraham Watkins needed to establish that its wrongful act, if
any, also caused a legal injury. This burden was not satisfied.
In its motion for summary judgment, Abraham Watkins focuses primarily on
the sanctions allegation and argues that that specific cause of action is barred by
the statute of limitations. Abraham Watkins does not discuss the remaining
allegations at any considerable length, and it never expressly argues when Haase
sustained a legal injury as to those allegations. Establishing when the injury was
sustained is essential to proving that the tort was completed and the cause of action
accrued.
The date of accrual proposed by Abraham Watkins essentially suggests that
Haase could have filed his claims as early as August 29, 2006, the day after
Abraham Watkins withdrew. We do not agree that Haase‘s torts were completed
by that time. To recover on a claim of professional negligence, there must have
been some facts in existence showing that Haase was damaged by the allegedly
negligent preparation of his federal complaint. See Alexander v. Turtur & Assocs.,
21
Inc., 146 S.W.3d 113, 117 (Tex. 2004) (enumerating the elements of a cause of
action for professional negligence). However, on the date of withdrawal, Haase‘s
case had not yet proceeded to trial; that date was still more than six months away,
in March 2007. In the intervening time, Haase or his newly retained attorneys
could have amended the pleadings or sought leave of court to file claims against
additional tortfeasors. Nothing in the record indicates that Haase was precluded
from obtaining this relief on the date Abraham Watkins withdrew. See Fed. R. Civ.
P. 15 (providing that a plaintiff may amend his pleadings within twenty-one days
of service, with the written consent of the opposing party, or with leave of court).
Moreover, Abraham Watkins has not explained how Haase could have proven any
damages on the date of withdrawal, before an adjudication of his other claims. See
Sanchez v. Hastings, 898 S.W.2d 287, 288 (Tex. 1995) (per curiam) (providing
that ―the statute of limitations for malpractice for failure to sue a tortfeasor is tolled
until litigation has concluded against other tortfeasors liable for the same
indivisible injury‖); Estate of Whitsett v. Junell, 218 S.W.3d 765, 770 (Tex.
App.—Houston [1st Dist.] 2007, no pet.) (providing similar authority for claims
alleging failure to assert additional causes of action against existing defendants).
Abraham Watkins has not carried its burden of showing that Haase sustained a
legal injury by the date of withdrawal.
An analogous conclusion was reached in Atkins v. Crosland, 417 S.W.2d
150 (Tex. 1967). In that case, a business owner filed a petition against his
accountant in 1963, alleging that he negligently prepared an income tax return in
1960. When the accountant was first hired in 1958, he calculated the business
owner‘s tax liability using the cash method of accounting, rather than the accrual
method. In 1960, the accountant switched to the accrual method to minimize the
business owner‘s tax liability, but he failed to comply with IRS regulations for
22
changing the basis on which he regularly computed income. Because of this
noncompliance, the IRS assessed a deficiency in 1961, less than two years from the
date of the business owner‘s suit. Id. at 151–52.
The accountant attempted to show that the cause of action was barred by the
statute of limitations, arguing that all of his wrongful acts had occurred in 1960,
more than two years before suit was filed. The supreme court disagreed, noting that
the accountant‘s actions alone were insufficient to trigger the accrual of a cause of
action. Instead, the court observed, the wrongful acts had to have resulted in some
legal injury before the tort was completed and actionable. In this instance, the legal
injury was not sustained until the assessment by the IRS. See id. at 153 (―If a
deficiency had never been assessed, the plaintiff would not have been harmed and
therefore would have had no cause of action.‖). Because the tort was not completed
until long after the accountant‘s wrongful acts, the court concluded that the
business owner‘s cause of action was timely and within the statute of limitations.
See id.
Like the accountant in Atkins, Abraham Watkins attempts to establish that
the causes of action against it are time-barred based solely on the latest date of its
allegedly wrongful conduct. Abraham Watkins has not shown, or even argued, the
date on which Haase sustained a legal injury. Therefore, Abraham Watkins has not
proven when the torts alleged by Haase were completed. By failing to show when
the cause of action accrued, Abraham Watkins has not established that it was
entitled to summary judgment as a matter of law.
E. Remand
In his sixth issue, Haase argues that if we decide to reverse the trial court‘s
judgment, we should remand this case to another county and district court. Haase
essentially contends that Abraham Watkins is a well-known and well-connected
23
law firm in the Houston area, and that the firm‘s established presence has
prevented him from obtaining a capable malpractice attorney to represent him.
As the plaintiff below, Haase elected to try his case in Harris County when
he filed his petition with the Harris County District Clerk. Haase has provided no
authority, and we are aware of none, that would permit a plaintiff to select an
alternate venue on remand based on his stated reason. Haase‘s sixth issue is
overruled. See Tex. R. App. P. 38.1(i) (providing that the appellant‘s brief ―must
contain a clear and concise argument for the contentions made, with appropriate
citations to authorities and to the record‖).
CONCLUSION
After applying the rule against fracturing, we conclude that Haase‘s only
claim was for professional negligence, and that this claim was based on three
separate factual allegations: (1) that Abraham Watkins coordinated the product
testing, which led to Haase‘s discovery sanctions; (2) that Abraham Watkins failed
to include additional tortfeasors in Haase‘s federal complaint, which limited his
recovery in the district court‘s 2010 judgment; and (3) that Abraham Watkins
failed to pursue a fraud claim against a Pearl River defendant, which also limited
his recovery. We affirm the trial court‘s judgment to the extent it concludes that
Haase‘s cause of action based on the first factual allegation is barred by the statute
of limitations. As for the remaining two allegations, the trial court‘s summary
judgment is reversed and remanded for additional proceedings consistent with this
opinion.
/s/ Adele Hedges
Chief Justice
Panel consists of Chief Justice Hedges and Justices Brown and Busby. (Brown, J.,
concurring and dissenting).
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