AFFIRMED; Opinion Filed April 21, 2020
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-18-01345-CV
NEXBANK, SSB, Appellant
V.
WINSTEAD PC, Appellee
On Appeal from the 193rd Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-15-01816
MEMORANDUM OPINION
Before Justices Bridges, Partida-Kipness, and Nowell
Opinion by Justice Nowell
NexBank, SSB sued Winstead PC for professional negligence and negligent
misrepresentation. Winstead filed a hybrid no-evidence and traditional motion for
summary judgment, which the trial court granted; the trial court’s order dismissed
all of NexBank’s claims with prejudice. The trial court also struck affidavits
included in NexBank’s response to Winstead’s motion. Appealing both orders,
NexBank argues the trial court erred by granting Winstead’s motion for summary
judgment and by striking the affidavits. We affirm the trial court’s judgment.
FACTUAL BACKGROUND
A. Underlying Dispute
On January 19, 2007, NexBank (as lender) entered into a loan agreement with
TCI Park West II, Inc. (the Borrower) to finance the purchase of property. The $62
million secured loan was guaranteed by Transcontinental Realty Investors, Inc. (the
Guarantor). In December 2008, the Borrower indicated it would be unable to repay
the loan, which was set to mature the following month. NexBank then hired
Winstead to represent NexBank in connection with the loan and, if necessary,
foreclosure of the property. For more than two years, Winstead acted as NexBank’s
counsel for matters relating to the loan.1 Finally, on June 7, 2011, the property was
sold for $29.5 million at a non-judicial foreclosure sale.
NexBank sued the Guarantor to recover the post-foreclosure deficiency
amount of approximately $33 million (the Guarantor Litigation). The Guarantor
pleaded invalid foreclosure as an affirmative defense. NexBank filed a motion for
summary judgment asserting it was entitled to three summary judgment rulings:
(1) the Guarantor was liable to NexBank pursuant to the terms of the guaranty
agreement; (2) in the agreement, the Guarantor contractually waived all defenses
and/or offsets to liability as well as all counterclaims that would provide a defense
or offset to liability; and (3) because of the waiver, the Guarantor could not object
1
NexBank’s pleadings include extensive discussions detailing the allegedly negligent acts Winstead
committed during the representation. Recitation of these alleged acts is not necessary for us to resolve this
appeal and, therefore, we do not list or discuss them. See TEX. R. APP. P. 47.1.
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to the foreclosure sale price and was liable to NexBank for the full amount of the
deficiency. Subsequently, the Guarantor filed a motion for summary judgment on
its affirmative defense of wrongful foreclosure. NexBank filed a cross-motion for
summary judgment on the Guarantor’s wrongful foreclosure affirmative defense. In
a single order, the trial court denied all three motions without further explanation.2
The case did not proceed to trial. Instead, NexBank and the Guarantor settled the
lawsuit for approximately $7 million. Winstead did not represent NexBank in the
Guarantor Litigation.
B. Suit Against Winstead
NexBank sued Winstead for professional negligence and negligent
misrepresentation arising from Winstead’s work on the loan and non-judicial
foreclosure. NexBank alleged Winstead made numerous mistakes during its
representation (which NexBank enumerated and discussed in its petition), those
mistakes caused the foreclosure to be invalid, and the invalid foreclosure precluded
NexBank from fully recovering on its deficiency claim against the Guarantor.
NexBank’s first amended petition alleged the trial court’s denial of its motion for
summary judgment on the Guarantor’s wrongful foreclosure affirmative defense
“indicated that Borrower and Guarantor had raised triable issues of fact as to whether
the foreclosure was wrongful, given the many hurdles imposed by the numerous
2
Judge Ken Molberg presided over the trial court.
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mistakes in the foreclosure process and documentation. If at trial [of the Guarantor
Litigation] the Foreclosure that Winstead had orchestrated was found wrongful, then
[NexBank] would not have recovered any of its $30 million-plus deficiency.”
Winstead filed a hybrid no-evidence and traditional motion for summary
judgment on NexBank’s professional negligence and negligent misrepresentation
claims. Winstead proffered several arguments, including that NexBank had no
evidence of causation. Winstead also moved to exclude testimony from Paul
Johnson, NexBank’s expert. Johnson, a commercial real estate attorney licensed in
Texas, provided an affidavit stating Winstead negligently committed a series of
errors that a reasonably prudent attorney with a specialization in commercial real
estate law practicing in Texas would not have committed. He further averred that,
had Winstead not committed these errors, the trial court in the Guarantor Litigation
would have granted NexBank’s motion for summary judgment and, had the
Guarantor presented its wrongful foreclosure claim at trial, “it is more likely than
not that they would have prevailed, and [NexBank] would have lost the deficiency.”
The trial court granted Winstead’s motion for summary judgment in its
entirety and dismissed all of NexBank’s claims with prejudice. As to the motion to
exclude Johnson, the trial court granted the motion in part and denied it in part. The
trial court denied the motion to the extent it challenged Johnson’s qualifications to
testify regarding the standard of care of an attorney conducting a non-judicial
foreclosure sale; denied the motion to the extent it sought to exclude Johnson’s
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opinions about the outcome of a trial of the Guarantor Litigation; and granted the
motion to the extent Johnson sought to render an opinion regarding the cause(s) of
the trial court’s rulings on the motions for summary judgment in the Guarantor
Litigation. This appeal followed.
LAW & ANALYSIS
A. Standard of Review
Winstead filed a combined traditional and no-evidence summary-judgment
motion. See TEX. R. CIV. P. 166a(c), (i). We review no-evidence motions under the
same legal sufficiency standard as a directed verdict. Painter v. Amerimex Drilling
I, Ltd., 561 S.W.3d 125, 130 (Tex. 2018). Under this standard, the nonmovant has
the burden to produce more than a scintilla of evidence to support each challenged
element of its claims. Id; see Sandberg v. STMicroelectronics, Inc., No. 05-18-
01360-CV, 2020 WL 1809469, at *3 (Tex. App.—Dallas Apr. 9, 2020, no pet. h.)
(“we must determine whether the nonmovant produced more than a scintilla of
probative evidence to raise a fact issue on the material questions presented.”). In a
traditional motion, the movant has the burden to show there is no genuine issue of
material fact and the movant is entitled to judgment as a matter of law. TEX. R. CIV.
P. 166a(c). A defendant is entitled to summary judgment if it conclusively negates
at least one element of the plaintiff’s claim. Painter, 561 S.W.3d at 130. When
reviewing either type of summary-judgment motion, we view the evidence “in the
light most favorable to the nonmovant, crediting evidence a reasonable jury could
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credit and disregarding contrary evidence and inferences unless a reasonable jury
could not.” Id.
When a party files a hybrid summary judgment motion on both no-evidence
and traditional grounds, we generally first review the trial court’s judgment under
the no-evidence standard of review. Rico v. L-3 Commc’ns Corp., 420 S.W.3d 431,
438-39 (Tex. App.—Dallas 2014, no pet.). Should we determine summary judgment
was appropriate under the no-evidence standard, we need not address issues related
to the traditional summary judgment motion. Id. at 439.
B. Elements of Professional Negligence Claim
To prove a professional negligence claim, the former client must show (1) the
existence of a duty of care owed to the client, (2) the duty was breached, and (3) the
breach proximately caused damage to the client. Starwood Mgmt., LLC v. Swaim,
530 S.W.3d 673, 678 (Tex. 2017). In its no-evidence motion for summary judgment,
Winstead challenged the third element; Winstead argued NexBank had no evidence
that its breach, if any, proximately caused damage to NexBank. Once Winstead
asserted its no-evidence challenge, the burden shifted to NexBank to produce more
than a scintilla of probative evidence to raise a fact issue on the challenged element.
See Sandberg, 2020 WL 1809469, at *3.
Proximate cause has two components: cause in fact and foreseeability. Rogers
v. Zanetti, 518 S.W.3d 394, 402 (Tex. 2017). “Cause in fact must be established by
proof that (1) the negligent act or omission was a substantial factor in bringing about
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the harm at issue, and (2) absent the negligent act or omission (‘but for’ the act or
omission), the harm would not have occurred.” Akin, Gump, Strauss, Hauer & Feld,
L.L.P. v. Nat’l Dev. & Res. Corp., 299 S.W.3d 106, 122 (Tex. 2009); Rogers, 518
S.W.3d at 403 (“[O]ur cause-in-fact standard requires not only that the act or
omission be a substantial factor but also that it be a but-for cause of the injury or
occurrence.”). Foreseeability “addresses the proper scope of a defendant’s legal
responsibility for negligent conduct that in fact caused harm” and “asks whether the
harm incurred should have been anticipated and whether policy considerations
should limit the consequences of a defendant’s conduct.” Rogers, 519 S.W.3d at
402. “Causation must be proved, and conjecture, guess, or speculation will not
suffice as that proof.” Akin, 299 S.W.3d at 122.
“In every case, the plaintiff must supply a causal link between the attorney’s
alleged negligence and the client’s damages.” Rogers, 518 S.W.3d at 404. “A
lawyer can be negligent and yet cause no harm.” Id. at 400. “And, if the breach of
a duty of care does not cause harm, no valid claim for legal-malpractice exists.” Id.
Generally, in a legal malpractice case, expert witness testimony is required to
rebut a defendant’s motion for summary judgment challenging the causation
element. Swaim, 530 S.W.3d at 679. The expert affidavit must be probative and
raise a fact issue. Id. Conclusory affidavits are not probative. Id. To avoid being
conclusory, the affidavit must explain “how and why the negligence caused the
injury.” Id. (quoting Jelinek v. Casas, 328 S.W.3d 526, 536 (Tex. 2010)). To that
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end, an expert’s opinion must set out a “demonstrable and reasoned basis on which
to evaluate [the] opinion.” Id. (quoting Elizondo v. Krist, 415 S.W.3d 259, 265 (Tex.
2013)).
C. Winstead’s No-Evidence Motion for Summary Judgment
Winstead moved for no-evidence summary judgment on the ground that
NexBank had no evidence of causation. In its sixth issue, NexBank argues the trial
court erred by granting Winstead’s no-evidence summary judgment motion because
the trial court previously ruled causation in this case is a question of law and, thus,
not subject to a no-evidence motion for summary judgment. Additionally, NexBank
asserts the testimony of Paul Johnson constitutes more than a scintilla of probative
evidence raising a fact issue on causation.
1. Causation as a Matter of Law
NexBank argues the trial court made an oral ruling that causation in this case
was to be decided as a matter of law and, therefore, the trial court could not have
granted a no-evidence motion for summary judgment on that basis. To support this
argument, NexBank relies on the transcript from an August 20, 2018 hearing where
the trial court considered numerous motions. The following dialogues about
causation appear in the reporter’s record from the hearing:
THE COURT: I am going to deny [Winstead’s] motion to strike
the jury demand with the exception of the causation issue, which I’ve
already said on the record I’m not going to proceed to trial without that
issue having been presented to the Court first by way of [a] motion for
summary judgment.
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....
THE COURT: What’s your rebuttal that I don’t need any
causation experts?
MR. KRYDER:3 Well, first of all, on the grounds on which we
move [to exclude Paul Johnson’s testimony], this is - - the first one is
that Judge Molberg would have granted a summary judgment. That
would be a matter of law.
And Johnson next opines that because of Winstead’s conduct,
had the borrower and guarantor presented their wrongful foreclosure
claims at trial, at trial, it’s more likely than not they would have
prevailed. That’s a matter of fact. What happens at trial is going to be
a fact question.
So this gets back to the other point that they have to have - -
THE COURT: Well, let me ask you this. What is your contention
that the Court shouldn’t hear any evidence on causation of the granting
or denying of the summary judgment motion? . . . And instead, I think
their argument is just read briefing on it. Because, in effect, what I
think would happen is you’re going to, in effect, present the summary
judgment motion to me that was presented to Judge Molberg, as a
practical matter.
MR. KRYDER: Certainly that is something that this Court can
decide as a matter of law.
Then if the Court gets to the second step about what would have
happened at trial, then the Court’s going to have to look at what the
evidence would have been on - -
THE COURT: So what’s your position on I don’t need expert
testimony on the issue of causation of whether or not Judge Molberg
should have granted the motion, but perhaps I do need it in terms of had
he not granted the motion and it proceeded to trial, what would have
happened at trial?
....
3
George Kryder represented Winstead at the hearing.
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MR. ZAPENDOWSKI:4 . . . . It’s still a question, Your Honor,
as to what Judge Molberg would have done.
THE COURT: But as a matter of fact, not as a matter of law.
MR. ZAPENDOWSKI: No, it’s a question of law, Your Honor.
Once causation becomes a question of law under Millhouse5 it’s - -
there’s nothing in that opinion suggesting that you parse one part of
causation and another part of causation. It’s all decided as a question
of law by the Court.
....
THE COURT: Here’s my ruling. I am striking Paul Johnson’s
testimony only, only on the issue of causation as to the granting or
denying of the summary judgment motion. . . . I don’t need any
causation testimony. But when I say “causation,” limited to the issue
of whether or not Judge Molberg would have granted - - or should have
granted the summary judgment motion.
....
I don’t need any testimony by anybody on the issue of the
granting of the summary judgment motion. Plaintiff. Defense. I agree.
That’s purely a legal issue to be briefed.
If the Court, in effect, says, no Judge Molberg . . . properly denied
the summary judgment, and then this trial has to decide whether or not
the negligence, if any, of Winstead caused the parties to settle on the
cheap, that could be an issue of expert testimony.
While the trial court initially made a broad proclamation that causation would be
decided as a matter of law, the court clarified its ruling later in the hearing. The trial
court subsequently differentiated between causation based on whether Judge
Molberg should have granted NexBank’s motions for summary judgment in the
4
Michael Zapendowski represented NexBank at the hearing.
5
See Millhouse v. Wiesenthal, 775 S.W.2d 626 (Tex. 1989).
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Guarantor Litigation and causation relating to whether Winstead’s alleged
negligence in its representation of NexBank “caused the parties [in the Guarantor
Litigation] to settle on the cheap.” We conclude the trial court did not decide all
matters relating to causation were purely legal issues. Rather, that ruling was limited
to whether Judge Molberg should have granted NexBank’s motions for summary
judgment in the Guarantor Litigation.
2. Evidence of Causation
NexBank relies on the expert testimony of Paul Johnson to establish
causation.6 Johnson averred Winstead negligently committed a series of errors that
a reasonably prudent attorney with a specialization in commercial real estate law
practicing in Texas would not have. He further averred: “It is also my opinion that
had Borrower and Guarantor presented their wrongful foreclosure claims at trial [in
the Guarantor Litigation], it is more likely than not that they would have prevailed,
and Plaintiffs would have lost the deficiency.” Winstead argues this statement is
speculative and conclusory on its face and, thus, is no evidence of causation as a
matter of law. We agree.7
“[T]he relevant question when addressing the adequacy of expert opinion
affidavits in legal malpractice cases is ‘Why’: Why did the expert reach that
6
NexBank does not challenge the trial court’s order excluding Johnson’s opinions about Judge
Molberg’s rulings on summary judgment motions in the Guarantor Litigation.
7
For purposes of this analysis, we will assume Winstead owed a duty of care to NexBank and breached
its duty by failing to properly handle the loan workout and foreclosure, resulting in an invalid foreclosure.
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particular opinion?” Rogers, 518 S.W.3d at 405. To demonstrate “why,” the
affidavit must explain the link between the facts the expert relied upon and the
opinion reached. See id.; see also Swaim, 530 S.W.3d at 679. Johnson’s affidavit
does not set forth any basis for his opinion that, had the Guarantor Litigation
proceeded to trial and the Guarantor presented its wrongful foreclosure defense, it is
more likely than not the Guarantor would have prevailed and NexBank would have
lost the deficiency because of Winstead’s errors. While his affidavit lists numerous
actions Winstead should have taken to ensure a valid foreclosure, Johnson does not
explain how an invalid foreclosure would have caused NexBank to lose the
Guarantor Litigation had that case gone to trial. See Swaim, 530 S.W.3d at 679; see
also Rogers, 518 S.W.3d at 405. Instead, without linking any facts to his conclusion,
he summarily announces it is more likely than not that NexBank would not have
prevailed. Because Johnson fails to provide a basis for his opinion, we conclude the
opinion is conclusory and is not probative evidence. Johnson’s “conjecture, guess,
or speculation will not suffice” as proof of what would have occurred had the
Guarantor Litigation proceeded to trial. See Akin, 299 S.W.3d at 122.
Because the only evidence NexBank offered to meet its burden to raise a fact
issue showing Winstead’s errors caused its damages is conclusory, we conclude
NexBank presented no evidence of causation. Therefore, we conclude the trial court
did not err by granting Winstead’s no-evidence motion for summary judgment on
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the ground that NexBank had no evidence of causation. We overrule NexBank’s
sixth issue.
D. Anti-Fracturing Doctrine
In its seventh issue, NexBank asserts its negligent misrepresentation claim is
not barred by the anti-fracturing rule. The anti-fracturing rule prevents a plaintiff
from converting what are actually professional negligence claims against an attorney
into other claims. James v. Witherite, No. 05-17-00799-CV, 2018 WL 5869641, at
*7 (Tex. App.—Dallas Nov. 9, 2018, no pet.) (mem. op.) (citing Won Pak v. Harris,
313 S.W.3d 454, 457 (Tex. App.—Dallas 2010, pet. denied)). For the anti-fracturing
rule to apply, the gravamen of the plaintiff’s complaints must focus on the quality or
adequacy of the attorney’s representation. Id. (Won Pak, 313 S.W.3d 457).
Professional negligence, or the failure to exercise ordinary care, includes giving a
client bad legal advice or otherwise improperly representing the client. Id. (citing
Murphy v. Gruber, 241 S.W.3d 689, 692-93 (Tex. App.—Dallas 2007, pet. denied)).
“For example, an attorney can commit legal malpractice by giving an erroneous legal
opinion or erroneous advice, by failing to give any advice or opinion when legally
obliged to do so, by disobeying a client’s lawful instruction, by taking an action
when not instructed by the client to do so, by delaying or failing to handle a matter
entrusted to the attorney’s care by the client, or by not using an attorney’s ordinary
care in preparing, managing, and presenting litigation that affects the client’s
interests.” Id. (citing Isaacs v. Schleier, 356 S.W.3d 548, 559 (Tex. App.—
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Texarkana 2011, pet. denied)); accord Murphy, 241 S.W.3d at 693. When
determining the applicability of the anti-fracturing rule, “we are not bound by the
labels the parties place on their claims.” Murphy, 241 S.W.3d at 697. Further,
whether certain allegations asserted against an attorney are actually claims for
professional negligence is a question of law to be determined by the court and is
reviewed de novo. Id. at 692.
In its negligent misrepresentation claim, NexBank alleges Winstead
“negligently supplied false information for the purpose of guiding [NexBank] in [its]
decisions about whether and how to foreclose on the Property.” NexBank also
alleges Winstead did not exercise reasonable care or competence in obtaining or
communicating the information provided in its legal advice, NexBank justifiably
relied on the misrepresentations in deciding how to implement foreclosure and
pursue deficiency claims against Borrower and Guarantor, and Winstead’s negligent
misrepresentations directly and proximately caused NexBank to suffer tens of
millions of dollars in damages.
NexBank’s negligent misrepresentation claim encompasses Winstead’s
alleged failure to obtain and communicate information as part of the legal advice
Winstead provided. NexBank’s complaints fall within the purview of a professional
negligence claim and, thus, are barred by the anti-fracturing rule. See James, 2018
WL 5869641, at *8; J.A. Green Dev. Corp. v. Grant Thornton, LLP, No. 05-15-
0029-CV, 2016 WL 3547964, at *8 (Tex. App.—Dallas June 28, 2016, pet. denied)
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(mem. op.) (where essence of plaintiff’s complaint was that attorney’s advice was
wrong and incomplete, plaintiff’s allegations focused on adequacy of representation
and constituted professional negligence claim); see also Murphy, 241 S.W.3d at
698–99 (where essence of pleaded allegations was attorney’s failure to properly
advise, inform, and communicate with client about case, allegations asserted claims
of professional negligence); Archer v. Med. Protective Co., 197 S.W.3d 422, 427
(Tex. App.—Amarillo 2006, pet. denied) (claims that lawyer neglected matters, mis-
evaluated case, and failed to communicate with client alleged professional
negligence). Accordingly, we conclude the trial court did not err by granting
Winstead’s motion for summary judgment as to the negligent misrepresentation
claim. We overrule NexBank’s seventh issue.
CONCLUSION
NexBank raises several additional issues in its brief. However, because we
conclude the trial court did not err by granting Winstead’s motion for summary
judgment, we need not resolve those issues to dispose of this appeal, and we decline
to do so. See TEX. R. APP. P. 47.1.
We affirm the trial court’s judgment.
/Erin A. Nowell/
ERIN A. NOWELL
JUSTICE
181345F.P05
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Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
NEXBANK, SSB, Appellant On Appeal from the 193rd Judicial District
Court, Dallas County, Texas
No. 05-18-01345-CV V. Trial Court Cause No. DC-15-01816.
Opinion delivered by Justice Nowell.
WINSTEAD PC, Appellee Justices Bridges and Partida-Kipness
participating.
In accordance with this Court’s opinion of this date, the judgment of the trial court is
AFFIRMED.
It is ORDERED that appellee WINSTEAD PC recover its costs of this appeal from
appellant NEXBANK, SSB.
Judgment entered this 21st day of April, 2020.
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