ACCEPTED
06-15-00017-CV
SIXTH COURT OF APPEALS
TEXARKANA, TEXAS
8/7/2015 4:51:41 PM
DEBBIE AUTREY
No. 06-15-00017-CV CLERK
IN THE COURT OF APPEALS FOR THE
FILED IN
SIXTH DISTRICT OF TEXAS 6th COURT OF APPEALS
AT TEXARKANA TEXARKANA, TEXAS
8/10/2015 8:34:00 AM
DEBBIE AUTREY
Clerk
BILLY FITTS AND FREIDA FITTS,
Appellants,
v.
MELISSA RICHARDS-SMITH, THE LAW FIRM OF GILLAM & SMITH, LLP,
E. TODD TRACY, AND THE TRACY FIRM, ATTORNEYS AT LAW,
Appellees.
Appeal from the 71st District Court of Harrison County, Texas
Trial Court Cause No. 14-0150
APPELLEES’ BRIEF OF MELISSA RICHARDS-SMITH AND THE LAW FIRM OF
GILLAM & SMITH, LLP
Wade C. Crosnoe Shawn W. Phelan
State Bar No. 00783903 State Bar No. 00784758
Sara B. Churchin Thompson, Coe, Cousins & Irons LLP
State Bar No. 24073913 Plaza of the Americas
Thompson, Coe, Cousins & Irons LLP 700 N. Pearl Street, Twenty-Fifth Fl.
701 Brazos, Suite 1500 Dallas, TX 75201-2832
Austin, TX 78701 Telephone: (214) 871-8245
Telephone: (512) 703-5078 Telecopy: (214) 871-8209
Fax: (512) 708-8777 E-Mail: sphelan@thompsoncoe.com
E-Mail: wcrosnoe@thompsoncoe.com
E-Mail: schurchin@thompsoncoe.com
Attorneys for Appellees Melissa Richards-Smith
and Law Firm of Gillam & Smith, LLP
Oral Argument Requested
IDENTITY OF PARTIES AND COUNSEL
1. Appellants/Plaintiffs Billy Fitts and Freida Fitts
Trial and Appellate Counsel:
Lindsey M. Rames
Texas Bar No. 24072295
Rames Law Firm, P.C.
5661 Mariner Drive
Dallas, Texas 75237
Telephone: (214) 884-8860
Facsimile: (888) 482-8894
Email: Lindsey@rameslawfirm.com
Carter L. Hampton
Texas Bar No. 08872100
Hampton & Associates, P.C.
1000 Houston Street, Fourth Floor
Fort Worth, Texas 76102
Telephone: (817) 877-4202
Facsimile: (817) 877-4204
Email: clhampton@hamptonlawonline.com
2. Appellees/Defendants E. Todd Tracy and The Tracy Firm, Attorneys at Law
Trial and Appellate Counsel:
Bruce A. Campbell
Campbell & Chadwick
4201 Spring Valley Road, Suite 1250
Dallas, TX 75244
Telephone: (972) 277-8585
Facsimile: (972) 277-8586
3. Appellees/Defendants Melissa Richards-Smith and The Law Firm of Gillam
& Smith, LLP
ii
Trial Counsel:
Shawn W. Phelan
State Bar No. 00784758
Tommy M. Horan II
State Bar No. 24063938
Thompson, Coe, Cousins & Irons, L.L.P
Plaza of the Americas
700 N. Pearl Street, Twenty-Fifth Floor
Dallas, TX 75201-2832
Telephone: (214) 871-8245
Telecopy: (214) 871-8209
E-Mail: sphelan@thompsoncoe.com
E-Mail: thoran@thompsoncoe.com
Appellate Counsel:
Wade C. Crosnoe
State Bar No. 00783903
Sara B. Churchin
State Bar No. 24073913
Thompson, Coe, Cousins & Irons, L.L.P.
701 Brazos, Suite 1500
Austin, Texas 78701
Telephone: (512) 708-8200
Facsimile: (512) 708-8777
iii
TABLE OF CONTENTS
Identity of Parties and Counsel ................................................................................. ii
Table of Contents ......................................................................................................iv
Index of Authorities ..................................................................................................vi
Statement Regarding Oral Argument .......................................................................ix
Statement of Issues.....................................................................................................x
Statement of Facts ......................................................................................................1
Summary of the Argument.........................................................................................7
Argument....................................................................................................................9
I. Standard of Review..........................................................................................9
II. Billy and Freida’s Negligence and Breach of Fiduciary Duty Claims
Fail Because They Cannot Establish the Elements of Proximate Cause
or Damages as a Matter of Law .....................................................................10
A. Principles of Contract Interpretation Governing Interpretation
of the Release ......................................................................................10
B. The Kemper Release Unambiguously Covers All Actions or
Claims That Billy and Freida May Have Had Against George
and Mary Fitts. ....................................................................................11
C. The Insuring Language of the RLI Umbrella Policy Required
George Fitts to Be Legally Liable Before the Excess Policy
Was Triggered .....................................................................................12
D. Billy and Freida’s Evidence of the Parties’ Purported Intentions
is Irrelevant and Inadmissible .............................................................15
1. The extrinsic evidence Billy and Freida offer is
inadmissible parol evidence ......................................................15
iv
2. The extrinsic evidence offered by Billy and Freida is
barred by the Agreement’s merger clause ................................16
E. The Release Specifically Releases Any Claims Against George
Fitts ......................................................................................................17
III. Billy and Freida’s Purported Contract Defenses Are Not Properly
Before This Court ..........................................................................................19
IV. Based on Billy and Freida’s Own Representations and Testimony,
There Was No Significant Likelihood of a Future Conflict of Interest
Developing in the Course of the Toyota Litigation .......................................22
V. Billy and Freida’s Fiduciary Duty Claim Is Nothing More Than an
Improperly Fractured Legal Malpractice Claim ............................................23
Conclusion and Prayer .............................................................................................29
Certificate of Compliance ........................................................................................31
Certificate of Service ...............................................................................................31
Appendix
Kemper Release ............................................................................................ Tab 1
v
INDEX OF AUTHORITIES
Cases
Aiken v. Hancock,
115 S.W.3d 26 (Tex. App.—San Antonio 2003, pet. denied) ...................... 24, 29
Archer v. Med. Protective Co. of Fort Wayne, Indiana,
197 S.W.3d 422 (Tex. App.—Amarillo 2006, pet. denied).................................27
Barker v. Roelke,
105 S.W.3d 75 (Tex. App.—Eastland 2003, pet. denied) ...................... 10, 16, 17
Beck v. Law Offices of Edwin J. (Ted) Terry, Jr., PC.,
284 S.W.3d 416 (Tex. App.—Austin 2009, no pet.) .................................... 26, 27
Cathey v. Booth,
900 S.W.2d 339 (Tex. 1995) ..................................................................................9
Citizens Standard Life Ins. Co. v. Muncy,
518 S.W.2d 391 (Tex. Civ. App.—Amarillo 1974, no writ) ...............................21
Coker v. Coker,
650 S.W.2d 391 (Tex. 1983) ................................................................................10
Collier v. Allstate County Mut. Ins. Co.,
64 S.W.3d 54 (Tex. App.—Fort Worth 2001, no pet.) ........................................13
Cosgrove v. Grimes,
774 S.W.2d 662 (Tex. 1989) ................................................................................22
Cox v. Robison,
105 Tex. 426, 150 S.W. 1149, 1155 (Tex. 1912) ................................................11
D.R. Horton-Tex., Ltd. v. Markel Intern. Ins. Co., Ltd.,
300 S.W.3d 740 (Tex. 2009) ................................................................................20
David J. Sacks, P.C. v. Haden,
266 S.W.3d 447 (Tex. 2008) ................................................................................11
Dresser Industries, Inc. v. Page Petroleum, Inc.,
853 S.W.2d 505 (Tex. 1993) ................................................................................11
Duncan v. Cessna Aircraft Co.,
665 S.W.2d 414 (Tex. 1984) ................................................................................11
Goffney v. Rabson,
56 S.W.3d 186 (Tex. App.—Houston [14th Dist.] 2001, no pet.)................ 23, 28
vi
Greathouse v. McConnell,
982 S.W.3d 689 (Tex. App.—Dallas 2007, pet. denied) .....................................23
Hamlin v. Gutermuth,
909 S.W.2d 114 (Tex. 1995) ................................................................................18
Haygood v. Hawkeye Ins. Servs. Inc.,
No. 12-11-00262CV, 2012 WL 1883811, at *2 (Tex. App.—Tyler, May 23
2012, no pet.)........................................................................................................14
Herrmann v. Lindsey,
136 S.W.3d 286 (Tex. App.—San Antonio 2004, no pet.)..................................20
Isaacs v. Schleier,
356 S.W.3d 548 (Tex. App.—Texarkana 2011, pet. denied) ....................... 23, 24
ISG State Ops., Inc. v. Nat’l Heritage Ins. Co., Inc.,
234 S.W.3d 711 (Tex. App.—Eastland 2007, pet. denied) .................................11
Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am.,
341 S.W.3d 323 (Tex. 2011) ......................................................................... 10, 21
Jampole v. Matthews,
857 S.W.2d 57 (Tex. App—Houston [1st Dist.] 1993, writ denied) ...................27
Kelley-Coppedge, Inc. v. Highlands Ins. Co.,
980 S.W.2d 462 (Tex. 1998) ................................................................................11
Kimleco Petro., Inc. v. Morrison & Shelton,
91 S.W.3d 921 (Tex. App.—Fort Worth 2002, pet denied) ................................24
Lopez v. Munoz, Hockema & Reed, L.L.P.,
22 S.W.3d 857 (Tex. 2000) ..................................................................................20
McMahan v. Greenwood,
108 S.W.3d 467 (Tex. App.—Houston [14th Dist.] 2003, pet. denied) ..............26
Morris v. Allstate,
523 S.W. 299 (Tex. Civ. App.—Texarkana 1975, no writ).................................17
Murphy v. Gruber,
241 S.W.3d 689 (Tex. App.—Dallas, pet. denied) ..............................................28
Nat’l Union Fire Ins. v. CBI Indus., Inc.,
907 S.W.2d 517 (Tex. 1995) ................................................................................15
Ohio Cas. Ins. Co. v. Time Warner Entm’t Co., L.P.,
244 S.W.3d 885 (Tex. App.—Dallas 2008, pet. denied) .............................. 13, 14
vii
Pool v. Durish,
848 S.W.3d 722 (Tex. App.—Austin 1992, writ denied) ....................................17
Precision Sheet Metal Mfg. Co., Inc. v. Yates,
794 S.W.2d 545 (Tex. App.—Dallas 1990, writ denied) ....................................21
Provident Life & Acc. Ins. Co. v. Knott,
128 S.W.3d 211 (Tex. 2003) ..................................................................................9
Smith v. Smith,
794 S.W.2d 823 (Tex. App.—Dallas 1990, no writ) ...........................................17
Sun Oil Co. (Delaware) v. Madeley,
626 S.W.2d 726 (Tex. 1981) ................................................................................10
Trousdale v. Henry,
261 S.W.3d 221 (Tex. App.—Houston [14th Dist.] 2008, pet. denied) ....... 26, 29
Ussery v. Hollebeke,
391 S.W.2d 497 (Tex. App.—El Paso, 1965 writ ref’d n.r.e.) ............................20
Williams v. Glash,
789 S.W.2d 21 (Tex. 1990) ..................................................................................20
Won Pak v. Harris,
313 S.W.3d 454 (Tex. App.—Dallas 2010, pet. denied) .............................. 25, 28
Statutes
Tex. Civ. Prac. & Rem. Code § 16.051 ...................................................................21
Rules
Tex. Comm. On Prof’l Ethics, Op. 624 (2013)........................................................23
Tex. Disciplinary Rules Prof’l Conduct R. 1.06 ......................................................23
Tex. R. App. P. 33.1.................................................................................................19
Tex. R. Civ. P. 166 ...............................................................................................9, 19
viii
STATEMENT REGARDING ORAL ARGUMENT
Appellees Melissa Richards-Smith and the Law Firm of Gillam & Smith
LLP believe oral argument would benefit the Court in its determination of the
issues in this case; they therefore respectfully request oral argument.
ix
STATEMENT OF ISSUES
1. The trial court did not err in granting Gillam & Smith’s Motion for
Summary Judgment because Billy and Freida Fitts’ own concealed conduct in
signing a release of claims against George Fitts negated their ability to prove
causation and damages in this legal malpractice action against Gillam & Smith.
2. Furthermore, the trial court properly granted summary judgment on
Appellants’ breach of fiduciary duty claim because it is an impermissible attempt
to recast and fracture their professional negligence claim. It is, therefore,
untenable as a matter of law.
x
STATEMENT OF FACTS
This is a professional liability case arising from a lawsuit related to an
automobile accident (CR 12–18). 1 George Fitts was killed when the Lexus he was
driving struck a pickup truck stopped to make a left-hand turn. His two brothers,
Plaintiff Billy Fitts and non-party William Fitts, were passengers in the Lexus and
were seriously injured (CR 13–15).
At the time of the accident, George Fitts had a primary automobile policy
issued by Kemper affiliate Trinity (“the Kemper Policy”) with a per person bodily
injury limit of $250,000, and a $5 million umbrella policy with RLI Insurance
Company (2 Supp. CR 11–58, 61–84). About a month after the November 2009
accident, Freida Fitts, Billy’s wife, opened a claim with George Fitts’s primary
insurance carrier (2 Supp. CR 86–90, 313). Freida—a licensed insurance agent
herself—forwarded documentation to Kemper and spoke with insurance
representatives about the claim at Kemper and RLI throughout January 2010 (2
Supp. CR 103–09, 116, 125, 324–28).
1
The clerk’s record was filed in this Court on April 8, 2015, and is referenced throughout this
brief as “(CR [page number]).” The second supplemental clerk’s record is referenced throughout
this brief as “(2 Supp. CR [page number]).” There are two “3A” Supplemental Clerk’s Records,
so designated by the district court clerk: one filed at 3:32:42 p.m. on June 17, and a second filed
at 4:05:10 the same day. Co-Appellees E. Todd Tracy and the Tracy Firm refer in their brief to
the later-filed 3rd Supplemental Record as the 4th Supplemental Record. This brief, however,
refers to the Fourth Supplemental Clerk’s Record as it is titled. References to that volume
appear as “(4 Supp. CR [page number]).”
1
Separately, Billy and Freida Fitts hired Melissa Richards-Smith, the law firm
of Gillam & Smith, LLP (collectively “Gillam & Smith”), and Todd Tracy and the
Tracy Law Firm in February 2010 to represent them in a product liability lawsuit
against Toyota (2 Supp. CR 128–32). George Fitts’ estate, his wife and children,
and William Fitts and his wife Phyllis also hired Gillam & Smith, LLP. They
signed contingent fee contracts with Gillam & Smith under which Billy and Freida
agreed they would have authority “to accept or reject any final settlement amount
after receiving the advice of our attorneys.” (emphasis added); (2 Supp. CR 331,
337). Billy and Freida never informed Gillam & Smith that they had an open claim
with Kemper at that time, that they had been in ongoing communications with
Kemper for the preceding three months, or that Kemper had initiated settlement
discussions with them (2 Supp. CR 140–66).
From the outset of their communications with Gillam & Smith, the members
of the Fitts family were focused on proving a defect in the Lexus and maintained
that George Fitts was not at fault in the accident. For instance, on the intake form
that he completed for Gillam & Smith, Billy wrote that the Lexus caused the
accident (2 CR 140–66, 152). At a meeting with Melissa Richards-Smith, Billy,
Freida, William and Phyllis, William told Richards-Smith that George Fitts not
only did nothing wrong in the wreck, but that George saved his life (2 Supp. CR
485). William Fitts explained that George “was unable to stop the car, and
2
swerved into the other car in order to take the brunt of the impact and save
William’s life” (Id.). In the same meeting, Billy Fitts told Richards-Smith that he
yelled at George to stop the car, and George tried to pump the brake, but the car
continued to accelerate even though George was hitting the brake” (Id.). Richards-
Smith recalled that “both Billy and William stated that not only was George not at
fault, but neither wanted to make a claim against him” (Id.).
Based on Billy’s statements about the cause of the accident, Gillam & Smith
prepared and filed a products liability petition against Toyota and filed it in
Harrison County on March 18, 2010 (2 Supp. CR 168). In his deposition in the
Toyota litigation, Billy testified under oath and penalty of perjury that a defect in
the Lexus caused the accident (4 Supp. CR 24–44). At no time did Billy tell
Gillam & Smith, or provide them any evidence, that his brother George Fitts
caused the accident:
Q (to Billy Fitts): Excluding what your lawyers have told
you, what is your understanding of what was wrong with
the Toyota?
A (Billy Fitts): My understanding, what was wrong with
the Toyota was that the car just took a sudden
acceleration and would not stop, and that’s what
happened that day.
(Id. at 53).
3
Without informing or seeking the advice of their attorneys—and contrary to
the fee agreement they signed with Gillam & Smith—Billy and Freida settled their
claim with Kemper on March 26, 2010, for $250,000 (2 Supp. CR 210–11,
Appendix Tab 1). In connection with that settlement, they signed a release
extinguishing any and all rights they possessed to pursue a claim against George
that arose out of the automobile accident. Id. The release provides that Billy and
Freida Fitts:
release, acquit and forever discharge George Fitts, Mary
Fitts and Trinity Universal Insurance Company of and
from all actions, causes of action, claims or demands for
damages, costs, loss of use, loss of service, expenses,
compensation, consequential damage or any other thing
whatsoever on account of, or in any way growing out of,
[the accident].
(2 Supp. CR 210–11, Appendix Tab 1).
Two weeks later, Freida emailed Melissa Richards-Smith, asking for the first
time if filing a claim with George’s excess insurer, RLI, would harm their position
in the products liability lawsuit against Toyota. (2 Supp. CR 195) Richards-Smith
said that it would, explaining that if Billy pursued George then Toyota “will
certainly use that to turn the family against one another in court.” Id. Richards-
Smith stated that “[Billy] was there so only he knows which way to go on liability.
I work for you and Billy so you have to give me my marching orders.” Id. Despite
this conversation, Freida still did not inform Melissa Richards-Smith at that time
4
that she had settled and signed a release with Kemper or that she had forwarded the
Kemper Release to RLI. Id. 2
Not until October 2010—more than six months after signing the Kemper
Release—did Billy and Freida inform their attorneys about the existence of the
release, that they had signed it, and that they had forwarded it to RLI (CR 404).
Months later, on July 14th, Freida admitted to Kemper that she did not tell
Richards-Smith or Gillam & Smith about the release because Richards-Smith
“would get half their settlement” (2 Supp. CR 202–03). After Richards-Smith
finally learned that Billy and Freida signed the release, she explained in an email to
Freida that if Billy had blamed George for the accident, it could hurt the product
liability case pending against Toyota (4 Supp. CR 18). Freida responded as
follows:
Melissa, Billy has never blamed George for the accident.
He has been adamant from the beginning saying that the
car (all of a sudden) started speeding at a high rate of
speed.
Why would anyone think Billy blamed George?
Id.
Billy and Freida’s product liability lawsuit against Toyota eventually settled.
On October 17, 2013, Billy and Freida sued Melissa Richards-Smith, The Law
2
After receiving a copy of the Kemper Release, RLI closed Billy and Freida’s file (2 Supp. CR
197–98).
5
Firm of Gillam & Smith, LLP, as well as their co-counsel, E. Todd Tracy, and The
Tracy Firm, asserting claims for legal malpractice, breach of fiduciary duty and
gross negligence (CR 12). The Petition alleged that, “[h]ad the Defendants not
been blinded by the sensationalized yet unproven allegations against Toyota,
Defendants would have turned their attention on behalf of a passenger against the
driver/operator of the automobile and his negligent operation and his insurance
coverage including liability, underinsured coverage and the umbrella policy” (CR
14). Among other things, Billy and Freida alleged that Defendants did not address
or communicate any conflicts of interest in representing both the driver and the
passenger of the Lexus, and that “Defendants allowed the statute of limitations to
expire for the bringing of any causes of action on behalf of plaintiffs against
George Fitts’ umbrella policy and Plaintiffs’ own insurance policy for the
extensive damages sustained by Plaintiffs” (CR 215).
Todd Tracy and the Tracy Law Firm (“Tracy Appellees”) filed a traditional
motion for summary judgment on the basis of the Kemper Release (CR 93). They
argued that the Kemper Release signed by Billy and Freida forever extinguished all
claims they had against George Fitts and his insurers and, therefore, Billy and
Freida could not prove that the conduct of the Tracy Defendants, rather than their
own conduct, caused them injury (CR 101). Gillam & Smith filed a motion for
summary judgment arguing that the Kemper Release negated the damage and
6
injury elements of Billy and Freida’s claims (CR 163). Gillam & Smith also filed
a supplemental motion for summary judgment, arguing that Billy and Freida’s
breach of fiduciary duty claim is but an improperly fractured legal malpractice
claim (CR 204–13). The motions were set for submission. The trial court granted
Gillam & Smith’s Motion for Summary Judgment on December 1, 2014 (CR 292).
SUMMARY OF THE ARGUMENT
This lawsuit is an attempt by Billy and Freida Fitts to blame their lawyers
for the effect of a settlement and release that they negotiated and executed entirely
on their own. After concealing that settlement and release from their lawyers and
insisting that George Fitts was not at fault in the accident, Billy and Freida then
turned around and sued their lawyers for not recommending separate counsel to
pursue a claim against George’s estate—a claim that would have directly
contradicted their own statements about the accident and would have been barred
by the release they chose to execute without the advice of their lawyers.
Billy and Freida do not dispute any of the following facts: They never
informed Gillam & Smith that they believed George Fitts, the driver of the vehicle
in the underlying accident, caused the accident. In fact, the record shows that Billy
made many sworn statements directly to the contrary, insisting that the automobile
accident in which he was injured was caused by the sudden and unintended
acceleration of the Lexus driven by George Fitts. Further, Billy and Freida never
7
informed Gillam & Smith that they had an open personal injury claim—as opposed
to a property claim—with George Fitts’s primary automobile insurer, seeking
compensation for their injuries when they hired Gillam & Smith to represent them
in a product liability suit against Toyota. Nor did Billy and Freida inform Gillam
& Smith that the insurer made a settlement offer and sent a proposed release in
March 2010. Instead, Billy and Freida signed the release without seeking the
advice of counsel, in breach of their legal representation agreement with Gillam &
Smith.
A valid release is a complete bar to any later action based on the matters
covered by the release. Here, the unambiguous language of the release that Billy
and Freida signed within weeks of retaining Gillam & Smith, and without seeking
their advice, bars them from pursuing a claim against George Fitts and recovering
under his $5 million excess liability policy. Because Billy and Freida cannot prove
that Gillam & Smith’s conduct—rather than their own conduct—proximately
caused them any damages, the trial court properly granted summary judgment on
all claims. Billy and Freida’s new appellate arguments—that they might have had
defenses to the enforcement of the release or might have been able to pursue a
fraudulent inducement claim against Kemper—were never raised in the trial court
and, thus, are not preserved for appeal. In any event, nothing prevented them from
raising those arguments in a suit against non-party Kemper.
8
The trial court also properly granted summary judgment on an independent
basis on the breach of fiduciary duty claim. Texas courts do not permit a legal
malpractice claim to be recast into separate claims, including a claim for breach of
fiduciary duty. In any case, even if this court permits Billy and Freida’s separate
claim for breach of fiduciary duty, it fails in the absence of any allegation that
Gillam & Smith gained an improper benefit through the representation.
For these reasons, this Court should affirm the trial court’s summary
judgment in favor of Gillam & Smith.
ARGUMENT
I. Standard of Review
An appellate court reviews a traditional summary judgment de novo,
determining whether a party established its right to judgment as a matter of law.
Provident Life & Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). A
defendant moving for traditional summary judgment must disprove at least one
element of plaintiff’s causes of action or conclusively establish each essential
element of an affirmative defense. Cathey v. Booth, 900 S.W.2d 339, 341 (Tex.
1995); see Tex. R. Civ. P. 166a(c). If defendant carries this burden, the burden
shifts to the nonmovant to raise a genuine issue of material fact to preclude
summary judgment. Booth, 900 S.W.2d at 341.
9
On review, the appellate court takes the nonmovant’s evidence as true,
indulging every reasonable inference resolving all doubts in favor of the
nonmovant. Knott, 128 S.W.3d at 215. If the trial court’s order granting summary
judgment does not specify the grounds for the judgment, a reviewing court must
affirm the trial court’s order if any of the theories presented to the trial court and
preserved for appeal are meritorious. Id. at 216.
II. Billy and Freida’s Negligence and Breach of Fiduciary Duty Claims Fail
Because They Cannot Establish the Elements of Proximate Cause or
Damages as a Matter of Law
A. Principles of Contract Interpretation Governing Interpretation of the
Release
In construing a written contract, the court of appeals’ objective “is to
ascertain the true intentions of the parties as expressed in the instrument.” Coker v.
Coker, 650 S.W.2d 391, 393 (Tex. 1983); see also Italian Cowboy Partners, Ltd. v.
Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011). “If the written
instrument is so worded that it can be given a certain or definite meaning or
interpretation, then it is not ambiguous and the court will construe the contract as a
matter of law.” Coker, 650 S.W.2d at 393. Only if a contract is susceptible to
more than one “reasonable” interpretation is it considered ambiguous. Id.
The parol evidence rule generally circumscribes the use of extrinsic
evidence when interpreting an integrated document. Sun Oil Co. (Delaware) v.
10
Madeley, 626 S.W.2d 726, 731 (Tex. 1981). Where a contract contains a merger
or integration clause, its execution presumes that all prior negotiations and
agreements relating to the transaction are merged into the contract. Barker v.
Roelke, 105 S.W.3d 75, 83 (Tex. App.—Eastland 2003, pet. denied). Such an
agreement will “be enforced as written and cannot be added to, varied, or
contradicted by parol evidence.” ISG State Ops., Inc. v. Nat’l Heritage Ins. Co.,
Inc., 234 S.W.3d 711, 719 (Tex. App.—Eastland 2007, pet. denied). Parol
evidence is not admissible for the purpose of creating an ambiguity in an
agreement. Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462, 464
(Tex. 1998); see David J. Sacks, P.C. v. Haden, 266 S.W.3d 447, 450 (Tex. 2008)
(“An unambiguous contract will be enforced as written, and parol evidence will not
be received . . . .”).
B. The Kemper Release Unambiguously Covers All Actions or Claims
That Billy and Freida May Have Had Against George and Mary Fitts.
“In general, a release surrenders legal rights or obligations between the
parties to an agreement.” Dresser Industries, Inc. v. Page Petroleum, Inc., 853
S.W.2d 505, 507–08 (Tex. 1993) (citing Cox v. Robison, 105 Tex. 426, 150 S.W.
1149, 1155 (Tex. 1912)). A release applies to a party who is specifically identified
in the release or described with sufficient particularity. See Duncan v. Cessna
Aircraft Co., 665 S.W.2d 414, 419 (Tex. 1984). The release extinguishes the claim
11
or cause of action “as effectively as would a prior judgment between the parties
and is an absolute bar to any right of action on the released matter.” Dresser
Indus., 853 S.W.2d at 508.
Under the plain language of the Kemper Release, in exchange for $250,000,
Billy and Freida Fitts agreed to:
release, acquit and forever discharge George Fitts, Mary
Fitts and Trinity Universal Insurance Company of and
from and all actions, causes of action, claims or demands
for damages, costs, loss of use, loss of service, expenses,
compensation, consequential damage of any other thing
whatsoever on account of, or in any way growing out of
[the November 6, 2009 accident] . . .
(2 Supp. CR 210–11).
The legal meaning of this plain language is a complete release of any and all
claims Billy and Freida had against George and Mary Fitts that were related to the
automobile accident. By virtue of the release, Billy and Freida no longer had any
legal claims against George Fitts and, thus, nothing to pursue from his umbrella
liability insurer, RLI.
C. The Insuring Language of the RLI Umbrella Policy Required George
Fitts to Be Legally Liable Before the Excess Policy Was Triggered
The insuring language of the RLI umbrella policy states that:
We [RLI] will pay an amount for which anyone covered
by this policy becomes legally liable for Injury due to an
Occurrence which takes place during the Policy Period
and in the Policy Territory. This insurance applies:
12
a. As excess insurance over and above the greater of
(1) the Minimum Limit of Coverage as stated in
the Declarations which is required to be provided
by the Basic Policies. . .
(2 Supp. CR 263, 273) (italics added). The relevant policy definitions are as
follows:
Injury means Bodily Injury, Personal Injury or Property
Damage
(2 Supp. CR 271).
Occurrence means:
1. An accident, including continuous or repeated
exposure to the same general harmful conditions, that
results in Bodily Injury or Property Damage.
2. An offense that results in Personal Injury.
Id.
Basic Policy or Policies means a policy or policies listed
in the declarations . . . which provides primary liability
coverage.
Id.
Because he was the named insured on the RLI policy, George Fitts was
“covered by this policy” for the Lexus he owned and that was involved in the 2009
accident.
Texas courts have held that a covered person becomes “legally liable” to pay
an amount “only after an insured’s legal responsibility for covered damages has
13
been established by judgment or settlement.” Ohio Cas. Ins. Co. v. Time Warner
Entm’t Co., L.P., 244 S.W.3d 885, 890 (Tex. App.—Dallas 2008, pet. denied);
Collier v. Allstate County Mut. Ins. Co., 64 S.W.3d 54, 62 (Tex. App.—Fort Worth
2001, no pet.) (“[T]he duty to indemnify only arises after an insured has been
adjudicated, whether by judgment or settlement, to be legally responsible for
damages in a lawsuit.”); see Haygood v. Hawkeye Ins. Servs. Inc., No. 12-11-
00262CV, 2012 WL 1883811, at *2 (Tex. App.—Tyler, May 23 2012, no pet.).
In Ohio Casualty, the Dallas Court of Appeals examined whether Time
Warner proved an entitlement to policy proceeds under an umbrella policy
requiring that West American Insurance Company pay sums “that the insured
becomes legally obligated to pay as damages.” Ohio Cas., 244 S.W.3d at 890.
The court observed that based on the insuring language of the umbrella policy, the
duty to indemnify arose only after the insured’s legal responsibility for covered
damages was established by judgment or settlement. This conclusion, the court
noted, “finds ample support in our State’s jurisprudence and other authorities.” Id.
at 890.
Here, Billy and Freida did not obtain a settlement with or a judgment
establishing George Fitts’s legal responsibility for covered damages beyond the
$250,000 they have already received. The unambiguous language of the release
signed by Billy and Freida would have prevented them from ever doing so. Based
14
on the release, George Fitts can no longer be “legally liable” to Billy and Freida for
the November 2009 accident.
D. Billy and Freida’s Evidence of the Parties’ Purported Intentions is
Irrelevant and Inadmissible
1. The extrinsic evidence Billy and Freida offer is inadmissible
parol evidence
In an attempt to convince this Court that the Kemper Release does not mean
what it says, Billy and Freida rely on an email from Sharon Baker, a claims
representative with Kemper. In the email, Baker tells Freida that “the settlement of
this claim will have no [e]ffect on any claims you make against the excess
insurance carrier” (3 CR 469–470). Based on this email, Billy and Freida argue
that “both Kemper and Appellants intended for the Kemper Release to only apply
to the tender of policy limits under the Kemper Primary Policy” (Appellants’ Brief
at p. 18).
But Billy and Freida do not argue, and have never argued, that the Kemper
Release is ambiguous. Nor have they offered any other explanation as to why this
parol evidence—or any other extrinsic evidence—should be allowed to negate or
alter the plain terms of the Kemper Release. See Nat’l Union Fire Ins. v. CBI
Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995) (“Only where a contract is first
determined to be ambiguous may the courts consider the parties’ interpretation and
admit extraneous evidence to determine the true meaning of the instrument.”
15
(internal citations omitted)). Because the plain language of the Kemper Release is
absolute and unyielding, it is the best indicator of the parties’ intentions. This
Court should reject Billy and Freida’s attempt to rewrite the plain language of the
Agreement, as did the trial court.
2. The extrinsic evidence offered by Billy and Freida is barred
by the Agreement’s merger clause
Aside from being barred by the parol evidence rule, the evidence of
“industry custom” and the parties “true intentions” (according to Billy and Freida),
is inadmissible because the Kemper Release contains an integration and merger
clause. The Agreement states:
No promise or inducement which is not herein expressed
has been made to me/us, and in executing this release
I/we do not rely upon any statement or representation
made by any person, firm or corporation hereby released
...
This release contains the ENTIRE AGREEMENT
between the parties hereto . . .
(2 Supp. CR 210).
As the Eastland Court of Appeals explained in Barker v. Roelke, an
integration or merger clause such as this prevents the introduction of extraneous
agreements:
The parties’ execution of a written agreement presumes
that all prior negotiations and agreements relating to the
transaction have been merged into it and it will be
16
enforced as written and cannot be added to, varied, or
contradicted by parol evidence. This rule is particularly
applicable where the written contract contains an
integration clause.
Barker v. Roelke, 105 S.W.3d at 83 (emphasis added). Accordingly, Billy and
Freida may not rely on the Sharon Baker email or any other extrinsic evidence
purporting to state the parties’ intentions. See also Smith v. Smith, 794 S.W.2d
823, 827 (Tex. App.—Dallas 1990, no writ) (“[I]f the parties have integrated their
agreement into a single written memorial, all prior negotiations and agreements
with regard to the same subject matter are excluded from consideration whether
they were oral or written.”).
E. The Release Specifically Releases Any Claims Against George Fitts
Billy and Freida argue that the Kemper Agreement did not release their
claims against George Fitts under the RLI policy because it did not specifically
name the RLI policy. This argument misses the mark. “[A] party who releases an
insured from liability retains no cause of action against the insurer.” Pool v.
Durish, 848 S.W.3d 722, 723 (Tex. App.—Austin 1992, writ denied). This rule
contemplates that the insured must be liable to the injured person before the insurer
can be held liable. Id. “Settlement of all claims against the insured destroys this
required link.” Id. (emphasis added).
17
Here, Billy and Freida had no direct claim against RLI under the umbrella
policy, so the fact that the Agreement did not mention RLI or the umbrella policy
is irrelevant. See id; Morris v. Allstate, 523 S.W. 299, 301 (Tex. Civ. App.—
Texarkana 1975, no writ) (holding that plaintiff–appellant has no right of action
against insurance company on the questions of coverage and liability for payment
of damages until she first established her claim against tortfeasor by judgment or
written agreement). The required link between Billy and Freida and the RLI policy
was destroyed when Billy and Freida signed an Agreement releasing all of their
claims against George Fitts, the insured, related to the November 2009 accident.
Because George Fitts cannot be held liable to the Fittses, the RLI policy can never
be triggered. If Billy and Freida attempt to sue George Fitts’s estate, they will find
themselves in the same exact scenario they find themselves in now: holding a
$250,000 settlement and facing a meritorious summary judgment based on the
unambiguous terms of the Kemper Release.
Billy and Freida’s brief contends that Gillam & Smith argued “essentially”
that execution of the Kemper Release was the sole proximate cause of Billy and
Freida’s injuries, but did not conclusively establish the inferential rebuttal defense
(Appellants’ Brief at p. 34–35). This argument is but a straw-man and must be
rejected.
18
Sole proximate cause was not a theory before the trial court, nor is it at issue
here. The broader argument raised by Gillam & Smith is the lack of a causal
relationship between the damages Billy and Freida sued for, the actions of Gillam
& Smith, and the alleged injury the Fittses suffered. See Hamlin v. Gutermuth, 909
S.W.2d 114, 117 (Tex. 1995). Suffering harm while being represented by a lawyer
does not ipso facto mean the lawyer caused the harm. In this case, Billy and
Freida’s alleged harm—their inability to sue George Fitts, obtain a judgment
against him, and then recover against his $5 million insurance policy—is the direct
result of their execution of the Kemper Release without first consulting their
attorneys. The release conclusively disproves the causation and damages elements
of their claims.
III. Billy and Freida’s Purported Contract Defenses Are Not Properly
Before This Court
For the first time in the history of this case, Billy and Freida speculate in
their appellate brief that even if the settlement released RLI, Billy and Freida
could, nevertheless, have rescinded the release based on contract defenses of
mutual mistake and fraudulent inducement. Billy and Freida argue that “assuming
arguendo that the release had the legal effect that Appellees claim it did, that did
not relieve Appellees of their duty to their clients to resolve the fraud that was
perpetrated upon their clients” (Appellants’ Brief at p. 26).
19
These novel arguments were never raised by Billy and Freida in the trial
court. They are, therefore, waived. See Tex. R. Civ. P. 166a(c) (“[In summary
judgment practice,] “[i]ssues not expressly presented to the trial court by written
motion, answer or other response shall not be considered on appeal as grounds for
reversal.”); Tex. R. App. P. 33.1(a)(1) (requiring that, to properly present a claim
for review on appeal, the record must reflect that the party raised that claim in the
trial court); see D.R. Horton-Tex., Ltd. v. Markel Intern. Ins. Co., Ltd., 300 S.W.3d
740, 743 (Tex. 2009) (“A non-movant must present its objections to a summary
judgment motion expressly by written answer or other written response to the
motion in the trial court or that objection is waived.”); Lopez v. Munoz, Hockema
& Reed, L.L.P., 22 S.W.3d 857, 862 (Tex. 2000) (stating that in an appeal of
summary judgment, the Court would not consider arguments or issues that were
not presented to the trial court). Because Billy and Freida never made these
arguments in the trial court, they are not preserved for appeal and this Court may
not consider them.
Even if this Court could consider Billy and Freida’s purported contract
defenses, however, they still would not carry the day. The alleged mistake about
the Kemper Release was a mistake about the release’s legal effect; it was not “a
misconception of mistake of a material fact” (Appellants’ Brief at p. 21). See
Williams v. Glash, 789 S.W.2d 21, 264 (Tex. 1990). It has long been established
20
that a mistake of law is not grounds for rescission of a contract. Herrmann v.
Lindsey, 136 S.W.3d 286, 292 (Tex. App.—San Antonio 2004, no pet.); see Ussery
v. Hollebeke, 391 S.W.2d 497, 501 (Tex. App.—El Paso, 1965 writ ref’d n.r.e.).
Billy and Freida’s theory of rescission arising from Kemper’s purported
misrepresentation about the legal effect of the release is likewise flawed because it
is based on a non-actionable statement of opinion, not of fact. See Italian Cowboy
Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 337–38 (Tex. 2011);
Citizens Standard Life Ins. Co. v. Muncy, 518 S.W.2d 391, 394–95 (Tex. Civ.
App.—Amarillo 1974, no writ) (“To be fraudulent and the basis for rescission of a
contract, the misrepresentation must be one of present or past facts.”).
Finally, to the extent Billy and Freida had a valid claim for rescission or
fraud against Kemper, their remedy was to pursue those claims against Kemper.
Billy and Freida could have pursued that remedy at the time they learned their
claim under the RLI policy was barred by virtue of the Kemper Release. After all,
the release was less than four years old when they filed this suit. See Tex. Civ.
Prac. & Rem. Code § 16.051; Precision Sheet Metal Mfg. Co., Inc. v. Yates, 794
S.W.2d 545, 550 (Tex. App.—Dallas 1990, writ denied) (“Suits for rescission
predicated upon fraud, failure of consideration, and mutual mistake are governed
by the four-year statute of limitations.”) Their failure to do so is but further
21
evidence that Gillam & Smith’s conduct did not proximately cause Billy and
Freida’s damages related to the signing of the Kemper Release.
IV. Based on Billy and Freida’s Own Representations and Testimony,
There Was No Significant Likelihood of a Future Conflict of Interest
Developing in the Course of the Toyota Litigation
Billy and Freida maintain that a conflict of interest existed in Gillam &
Smith’s representation of both Billy and Freida Fitts and other members of the Fitts
family. Even if this were true, however, it would not change the fact that the
Kemper Release precludes them from showing they were damaged by the alleged
conflict. Furthermore, the fatal flaw with this theory is that it is inescapably
contrary to the undisputed statements and testimony given by Billy Fitts in the
lawsuit filed against Toyota.
According to Billy and Freida, Gillam & Smith should have somehow
divined that the statements Billy Fitts made on his intake form, in verified
interrogatories, and in his sworn testimony, were false. Moreover, according to
Billy and Freida, Gillam & Smith should have somehow assumed the opposite of
what Billy Fitts told them—that he actually blamed his brother for the accident,
and not some product defect in the Lexus—and then proceeded to file a lawsuit
against George Fitts, against Billy and Freida’s clear wishes.
Lawyers are not permitted to ignore their clients and the information
provided by them. Rather, in Texas an attorney is expected to evaluate possible
22
claims and potential conflicts using the information the client provides. A lawyer’s
conduct is evaluated based on the information the attorney possesses at the relevant
time, rather than the theoretical facts posited after-the-fact. See Cosgrove v.
Grimes, 774 S.W.2d 662, 664 (Tex. 1989). “A violation of Rule 1.06(b)(2) occurs
if the lawyer’s representation of one client “reasonably appears to be or becomes
adversely limited by the lawyer’s or law firm’s responsibilities to another client
. . . .” Tex. Disciplinary Rules Prof’l Conduct R. 1.06(b)(2), reprinted in Tex.
Gov’t Code Ann., tit 2, subtit. G, app. A (West 2005) (Tex. State Bar R. art. X,
§ 9). Given that Billy and Freida insisted from the outset that George Fitts was not
responsible for the 2009 accident, Billy and Freida cannot now argue, after-the-
fact, that their representation reasonably appeared to be adversely limited by the
Smith Appellee’s representation of George Fitts in violation of Rule 1.06(b)(2).
See Tex. Comm. On Prof’l Ethics, Op. 624 (2013) (stating that if in the early stages
of representation a lawyer reasonably believes that there is no significant
likelihood of the possibility of a future conflict developing, then there is no Rule
1.06(b)(2) conflict).
V. Billy and Freida’s Fiduciary Duty Claim Is Nothing More Than an
Improperly Fractured Legal Malpractice Claim
A claim that arises out of allegedly bad legal advice or potentially improper
legal representation is one for legal malpractice—not for breach of fiduciary duty.
23
See Isaacs v. Schleier, 356 S.W.3d 548, 559 (Tex. App.—Texarkana 2011, pet.
denied); Greathouse v. McConnell, 982 S.W.3d 689, 692 (Tex. App.—Dallas
2007, pet. denied); Goffney v. Rabson, 56 S.W.3d 186, 190–93 (Tex. App.—
Houston [14th Dist.] 2001, no pet.) (“Texas law does not permit a plaintiff to
divide or fracture her legal malpractice claims into additional causes of action.”);
Aiken v. Hancock, 115 S.W.3d 26, 28–29 (Tex. App.—San Antonio 2003, pet.
denied) (holding that a claim arising from alleged misrepresentations by an
attorney constituted only malpractice claim and could not be fractured into claims
under the DTPA or under a breach of fiduciary duty theory).
This Court has summed up the distinction between the two claims:
The focus of breach of fiduciary duty is whether an
attorney obtained an improper benefit from representing
a client, while the focus of a legal malpractice claim is
whether an attorney adequately represented a client.
The essence of a breach of fiduciary duty involves the
“integrity and fidelity” of an attorney. A breach of
fiduciary duty occurs when an attorney benefits
improperly from the attorney-client relationship by,
among other things, subordinating his client’s interests to
his own, retaining the client’s funds, using the client’s
confidences improperly, taking advantage of the client’s
trust, engaging in self-dealing, or making
misrepresentations.
Unlike a claim for breach of fiduciary duty, legal
malpractice is based on negligence, because such claims
arise from an attorney’s alleged failure to exercise
ordinary care. A cause of action for legal malpractice
24
arises from an attorney giving a client bad legal advice or
otherwise improperly representing the client.
Isaacs, 356 S.W.3d at 559 (internal citations omitted) (quoting Kimleco Petro., Inc.
v. Morrison & Shelton, 91 S.W.3d 921, 923–24 (Tex. App.—Fort Worth 2002, pet
denied)).
Applying this distinction, the Court held in Isaacs that a plaintiff’s claims
that “concern[ed] the conflict of interest, failure to disclose the dual nature of the
representation and possible consequences, and failing to obtain informed consent
and waiver of any conflicts of interest” stated only claims for negligence, rather
than fraud or breach of fiduciary duty. 356 S.W.3d at 559. As here, the plaintiffs’
claims in Isaacs did not “allege the type of dishonestly or intentional deception that
will support a breach-of-fiduciary duty claim.” Id. at 559; see Won Pak v. Harris,
313 S.W.3d 454, 458 (Tex. App.—Dallas 2010, pet. denied) (holding that
plaintiff’s breach-of-fiduciary duty claim does “nothing more than recast her
claims for professional negligence under alternative labels”).
Regardless of the labels used in their pleadings, Billy and Freida’s attempt to
impermissibly recast their legal malpractice claim as an additional claim for breach
of fiduciary duty should be rejected. See Pak, 313 S.W.3d at 458. Billy and
Freida never alleged in the trial court that Gillam & Smith engaged in acts of
dishonesty or intentional deception or that Gillam & Smith subordinated Billy and
25
Freida’s interests to their own. Billy and Freida instead argued that “it is easy to
see how [Gillam & Smith] failed to realize that Billy and Freida Fitts’s best case
was not against Toyota, but against George Fitts’ insurance.” (CR 230). These are
allegations of mere negligence; they do not rise to allegations of dishonesty and
intentional deception that are required to sustain a claim of breach of fiduciary
duty.
The cases that Billy and Freida rely on prove this point. For instance, in
Trousdale v. Henry, 261 S.W.3d 221, 232 (Tex. App.—Houston [14th Dist.] 2008,
pet. denied), the Fourteenth Court of Appeals emphasized that to support a breach
of fiduciary duty claim, “the allegations in the petition must amount to self-
dealing, deception, or misrepresentations in the representation of the plaintiff that
go beyond the mere negligence allegations in a legal malpractice action.” In that
case, the attorneys made affirmative misrepresentations to the client and refused to
return the client’s files so they could conceal that the cases had been dismissed and
time-barred. Id. at 232; see also Beck v. Law Offices of Edwin J. (Ted) Terry, Jr.,
PC., 284 S.W.3d 416, 438–39 (Tex. App.—Austin 2009, no pet.) (concluding that
appellants’ “conflict of interest” complaint sounded in negligence only and not
breach of fiduciary duty because the appellants did not allege that the attorneys
“deceived them, pursued their own pecuniary interest over the appellants’ interests,
26
or obtained any improper benefit from failing to disclose the conflict or advising
appellants to obtain separate counsel” (internal alterations omitted)).
Likewise, in all the cases Billy and Freida point to as supporting their
fractured claims, the plaintiffs made allegations of fraud or self-dealing to support
their separate breach of fiduciary duty claim. See, e.g., McMahan v. Greenwood,
108 S.W.3d 467, 496 (Tex. App.—Houston [14th Dist.] 2003, pet. denied)
(alleging that the attorney gave false information and advice to wrongfully induce
the client into contributing assets); 3 Archer v. Med. Protective Co. of Fort Wayne,
Indiana, 197 S.W.3d 422, 427–28 (Tex. App.—Amarillo 2006, pet. denied)
(allowing a separate claim of breach of fiduciary duty based on an attorney’s
pursuit of his own pecuniary interests over his clients’).
Here, Billy and Freida never argued to the trial court that Gillam & Smith
engaged in self-dealing or deception that transcended professional negligence. (CR
7) Indeed, Billy and Freida failed to allege in their petition that Gillam & Smith
deceived them or acted dishonestly. In addition, they failed to plead their newly
argued theory that Gillam & Smith obtained an improper benefit from the legal
representation of Billy and Freida. The only “benefit” they identified were fees
associated with the recovery of expenses they incurred in the prosecution of the
3
In Jampole v. Matthews, 857 S.W.2d 57, 61–63 (Tex. App—Houston [1st Dist.]
1993, writ denied), the court held that the client stated a claim for fraud separate
from a negligence claim.
27
Toyota lawsuit—none of which Billy and Freida argue were improper. (CR 234)
(“Defendants were able to pursue the Toyota litigation and ultimately recover the
expenses they incurred in the prosecution of the suit.”)
Receiving payment for an expert fee, like payment for attorney’s fees, is
insufficient, as a matter of law, to support a breach of fiduciary duty claim. See
Beck, 284 S.W.3d at 438–39 (“Although appellants urge that [defendants] . . .
stood to obtain attorneys’ fees that a separate counsel otherwise would have
received . . . both the Murphy and Floyd courts characterized such a complaint,
standing alone, as a negligence claim”) (citing Murphy v. Gruber, 241 S.W.3d 689,
699 (Tex. App.—Dallas, pet. denied), and Floyd v. Hefner, 556 F. Supp. 2d 617,
662 (S.D. Tex. 2008)); see Murphy, 241 S.W.3d at 699 (rejecting argument that
obtaining a multi-million dollar attorney’s fee, without more, can support a breach-
of-fiduciary-duty claim); see also Won Pak, 313 S.W.3d at 454 (“To the extent that
appellants argue [the attorney] favored his own pecuniary interest in obtaining his
legal fee over appellants’ interests, we conclude that this interest, without more, is
insufficient to allege the type of dishonesty or intentional deception necessary to
convert a negligence claim into one for breach of a fiduciary duty.”).
Notably, Gillam & Smith did not receive any fees for their two-year
representation of Billy and Freida. And Gillam & Smith never received any
portion of the $250,000 Kemper settlement either. In short, Billy and Freida have
28
made no tenable allegation that Gillam & Smith obtained an improper benefit from
representing them.
At bottom, “[t]he essence of a breach of fiduciary duty claim involves the
‘integrity and fidelity’ of an attorney.” Id. (citing Goffney, 56 S.W.3d at 193). For
example, “failure to deliver funds belonging to a client, improper use of client
confidences, or engaging in self-dealing” are the types of improper conduct giving
rise to a breach of fiduciary duty claim. See Aiken v. Hancock, 115 S.W.3d 26, 28
(Tex. App.—San Antonio 2003, pet. denied); see also Trousdale v. Henry, 261
S.W.3d 221, 227 (Tex. App.—Houston [14th Dist.] 2008, no pet.). Because Billy
and Freida’s claim is really for negligence, and not breach of fiduciary duty, the
trial court properly granted summary judgment on that claim. This Court should
affirm.
CONCLUSION AND PRAYER
At bottom Billy and Freida have sued Gillam & Smith for failing to advise
them to retain separate counsel to pursue a claim against the umbrella insurer of
George Fitts—a claim that was rendered impossible by their own statements and
their own intentionally concealed release of George Fitts. Because the Kemper
Release legally bars Billy and Freida’s ability to establish that Gillam & Smith
proximately caused them damages, the trial court properly granted Gillam &
Smith’s Motion for Summary Judgment. The trial court also correctly granted
29
summary judgment on the basis that Billy and Freida have no breach of fiduciary
duty claim separate from their legal malpractice claim.
For these reasons, Gillam & Smith request that this Court affirm the trial
court’s summary judgment. Gillam & Smith also pray for any other and further
relief, at law or in equity, to which they are justly entitled.
Respectfully submitted,
THOMPSON, COE, COUSINS & IRONS L.L.P.
By: /s/ Wade Crosnoe
Wade C. Crosnoe
State Bar No. 00783903
Sara B. Churchin
State Bar No. 24073913
701 Brazos, Suite 1500
Austin, TX 78701
Telephone: (512) 703-5078
Fax: (512) 708-8777
E-mail: wcrosnoe@thompsoncoe.com
Shawn W. Phelan
State Bar No. 00784758
Add Tommy Horan
Thompson, Coe, Cousins & Irons, L.L.P.
Plaza of the Americas
700 N. Pearl Street, Twenty-Fifth Floor
Dallas, TX 75201-2832
Telephone: (214) 871-8245
Telecopy: (214) 871-8209
E-Mail: sphelan@thompsoncoe.com
Attorneys for Appellees Melissa Richards-
Smith and Law Firm of Gillam & Smith,
LLP
30
CERTIFICATE OF COMPLIANCE
I, Wade Crosnoe, the undersigned attorney, do hereby certify that the
foregoing Appellees’ Brief contains 6,993 words, according to the word count of
the computer program used to prepare it, and uses a 14-point typeface for all text in
compliance with Tex. R. App. P. 9.4(i).
By: /s/ Wade Crosnoe
Wade C. Crosnoe
CERTIFICATE OF SERVICE
I certify that a true and correct copy of this Appellees’ Brief was served on
August 7, 2015, via electronic service or email, to the following counsel:
Lindsey M. Rames
Rames Law Firm, P.C.
5661 Mariner Drive
Dallas, TX 75237
Telephone: 214.884.8860
Facsimile: 888.482.8894
Email: lindsey@rameslawfirm.com
Carter L. Hampton
Hampton & Associates, P.C.
1000 Houston Street, Fourth Floor
Fort Worth, TX 76102
Telephone: 817.877.4202
Facsimile: 817.877.4204
Email: clhampton@hamptonlawonline.com
Attorneys for Appellants,
Billy Fitts and Freida Fitts
Bruce A. Campbell
Campbell & Chadwick
4201 Spring Valley Road, Suite 1250
Dallas, TX 75244
Attorney for Appellees E. Todd Tracy
and The Tracy Firm, Attorneys at Law
/s/ Wade C. Crosnoe
Wade C. Crosnoe
31
RELEASE OF ALL CLAIMS
Osum Wo- 454 m&Z?
Adj Knstine Baker
FOR AND IN CONSIDERATION Of the payment to me/US of the jutn of Two Hundred Fifty Thymca^ nnihtrt
(J , Z5P.QP0.OQ ). and other good and valuable consideration. I^we. being of lawful age. have released and
discharged, and by these present* do for myself/ourselves, njy/oor heirs, executors, adrnintstrarafs and
assigns, release, acquit and forever discharge Georae Tltts. friary Fltts. and Trinflv Ifalversat Insurance
I
i
Company of and from and all actions, causes of action, claims or demands for damages, costs, toss of
use, loss of service*, expenses, compensation, consequential damage or any other thing whatsoever on
account of. or in any way growing out of, and all known amf unknown personal injuries and death and
i
property damage resulting or to result from an occurrence or jiccidenr that happened on or about rite 9_lh
day of November. 2PM ., at or near Highway 7?HeameTX.
I/we hereby acknowledge and assume all risk, chance or hazaril that the said injuries or damage may be or
become permanent progressive, greater, or more extensive wan is now known, anticipated or expected.
Ho promise v inducement which Is nor herein expressed hat [been made to me/ui. and in executfntf this
hereby released, or any agent, physician, doctor or any other! person representing them or any of them,
release I/we do not rely upon any statement or representation made by any person, firm or corporation.
concerning the nature, extent or duration of said damages or Josses or the legal liability therefor.
I/we understand that this settlement is the compromise of a doubtful and disputed claim, and that the
payment is nor to be construed as an admission of iiabill y on the part of the persons, firms and
corporations hereby released by whom liability Is expressly oenled, l/we further agree that this release
shall not be pleaded by me/us as a bar to any claim or suit.
It is further agreed and understood that folly frns will protect, Indemnify and hold harmless Gtfiise fjrts,
MaryjEIK&and Trinity Universal Insurance Company from claims, Pens or subrogated interest* arising from
benefits provided to or on behalf offiiUy,Fltts, which are related to the incident giving rise to this claim.
The undersigned acknowledges that he/she wttl satisfy such cii ims. liens or subrogated interests.
This release contains the ENTIRE AGREEMENT between the parties hereto, and rhe terms of thw release are
contractual and not a mere recital.
Any person who knowingly presents a false or fraudulent claim for the payment of a loss is guilty of a
crime and may be subject to fines and confinement in state prtfcon,
PLF00013
210
Kemper
l/we further state that l/we have carefully read the foregoing release and know the contents thereof, and
l/we sign the same as my/our own free act.
WITNESS. . hand and seal this. Sii^c. day of -MatcA^u. .
WITNESSES OWpH\ READ BEFORE SIGNING
.(SEAL)
Wily ntts
ADDRESS
(SEAU
Freilda Fitts
..(SEAL)
Courj^of
PLF00014
211