A client’s affidavit asserting that he was not liable on a note was insufficient to establish causation in a legal malpractice claim against a lawyer who did not respond to the summary judgment motion filed against the client in the underlying case. The court held that expert testimony was necessary to establish causation. Lewis v. Nolan, No. 01-04-00865-CV, 2006 Tex. App. Lexis 8710 (Tex. App.–Houston [1st Dist.] October 5, 2006).

Background

Federated Financial Services, Inc. ("FFS") was the holder of two notes. One note, dated April 7, 1987, and in the principal amount of $17,255, was signed by Lewis and a man who was his business partner at that time, Bill White ("the April 1987 note"). The borrowers on the April 1987 note were listed as "G. Niel [sic] Lewis & Bill White Baja Trax, Inc." The second note, dated November 21, 1987, and in the principal amount of $9,431.99, was signed by White alone ("the November 1989 note"). The borrower on the April 1987 note was listed as "Bill White dba BAJA TRAX, INC."

FFS sued Lewis and White based on the two notes ("the collection suit"). Nolan represented Lewis in the collection suit. In his deposition testimony in that lawsuit, Lewis admitted his liability on the April 1987 note. In affidavits filed in the later malpractice suit from which appeal is now taken, however, Lewis averred that

[t]he [April 1987] note that I was testifying to in the deposition [in the collection suit] was paid off after my then-partner [White] borrowed money at which time he signed on to pay the [November 1989] note. I was not obligated to pay the [November 1989]  [*3]  note, and the [April 1987] note (which the deposition testimony refers to) was paid off in full.

FFS moved for traditional summary judgment against Lewis in the collection suit based on the November 1989 note. It is undisputed that Nolan did not answer the motion or appear at the summary-judgment hearing, that the motion was granted, and that judgment was rendered against Lewis in May 1995 for $13,229.26. The parties disputed below the reasons for Nolan's failure to respond or to appear: Lewis filed affidavits averring that Nolan had told him that the suit against him was non-meritorious and that Nolan later denied having received the summary-judgment motion, even though he had. In contrast, Nolan filed an affidavit averring that he had advised Lewis that the lawsuit was meritorious, that Nolan received FFS's summary-judgment motion, that he tried unsuccessfully and repeatedly to contact Lewis about the motion, and that Nolan was never notified of the summary-judgment hearing.

On June 13, 2001, Lewis sued Nolan for legal malpractice (negligence), negligent misrepresentation, violations of the DTPA, and breach of contract. The factual bases that Lewis alleged for all causes of action were as follows:

While representing [Lewis], [Nolan] failed to respond to a motion for summary judgment or to an amended motion for summary judgment filed by the plaintiff in that case. Prior to the motions for summary judgment being filed and served on [Nolan], [Lewis's] deposition had been taken by the plaintiff in the [collection suit]. After the deposition [Nolan] told [Lewis] that he did not have to worry about the case and that it would be dismissed. However, on May 31, 1995, a final summary judgment was entered against [Lewis] in the amount of $13,229.26 plus court costs, prejudgment interest and post judgment interest. In late May 2001, [Lewis] discovered that judgment had been entered against him . . . . Eventually, [Lewis] negotiated a payoff of the judgment for the amount of $15,000.00. But for [Nolan's] failure to respond to the motion for summary judgment, [Lewis] would not have lost the case.

Lewis sought fee forfeiture, actual damages, mental-anguish damages, and treble damages under the DTPA, as well as attorney's fees, pre- and post-judgment interest, and costs. The attorney moved for summary judgment and the court granted the motion.

Legal Malpractice (Negligence)

"To prevail on a legal malpractice claim, a plaintiff must show 'that (1) the attorney owed the plaintiff a duty, (2) the attorney breached that duty, (3) the breach proximately caused the plaintiff's injuries, and (4) damages occurred.'" Alexander v. Turtur & Assocs., Inc., 146 S.W.3d 113, 117 (Tex. 2004) (quoting Peeler v. Hughes & Luce, 909 S.W.2d 494, 496 (Tex. 1995)).

"When the plaintiff's allegation is that some failure on the attorney's part caused an adverse result in prior litigation, the plaintiff must produce evidence from which a jury may reasonably infer that the attorney's conduct caused the damages alleged." Id.; Hoover v. Larkin, 196 S.W.3d 227, 231 (Tex. App.–Houston [1st Dist.] 2006, pet. denied). "Cases often refer to this causation aspect of the plaintiff's burden as the 'suit-within-a-suit' requirement." Hoover, 196 S.W.3d at 231. The suit-within-a-suit element is not shown merely by proving a breach of the standard of care, i.e., "even when negligence is admitted, causation is not presumed." Alexander, 146 S.W.3d at 119.

"[T]he trier of fact must have some basis for understanding the causal link between the attorney's negligence and the client's harm." Id. In general, this is accomplished through expert testimony on causation. Hoover, 196 S.W.3d at 231. Although lay testimony may sometimes suffice, expert testimony of causation is necessary  when the causal link is beyond the jury's common understanding. Alexander, 146 S.W.3d at 119.

The Court’s holding.

The Court found that expert testimony was required to establish causation; the client’s affidavit was insufficient:

It is undisputed that Lewis presented no expert opinion testimony concerning causation. However, Lewis contends that causation was so obvious here that expert testimony was unnecessary. Lewis relies instead on his own affidavit testimony, in which he averred as follows:

At the deposition that I gave in [the collection suit], I was asked a series of questions . . . regarding one of the two notes that were at issue in [the collection suit] and are now the basis of this case. The note that I was testifying to in the deposition was paid off after my then-partner [White] borrowed money at which time he signed on to pay the [November 1989] note. I was not obligated to pay the [November 1989] note, and the [April 1987] note (which the deposition testimony refers to) was paid off in full. Accordingly, I did not owe any money on either of the notes in question and the judgment that was entered against me in [the collection suit] was improperly entered and was totally defensible.

Lewis contends that he did not need expert testimony on causation because Nolan's failure to respond to FFS's summary-judgment motion – when Lewis allegedly had an iron-clad defense to both notes and, thus, to the collection suit – was tantamount to a "fail[ure] to appear at trial" and thus to the situation in which counsel allows a default judgment to be entered against his client. We reject this analogy.

Failing to file an answer or to appear at all is not necessarily the same as failing to respond to a traditional summary-judgment motion. For example, the burden is entirely on the party moving for traditional summary judgment (in the collection suit, plaintiff FFS) to establish its entitlement to summary judgment as a matter of law; therefore, only if FFS carried its burden as a matter of law would the burden have shifted to Lewis to raise a fact issue on FFS's cause of action. See Phan Son Van v. Pena, 990 S.W.2d 751, 753 (Tex. 1999).

The trial court may not grant a summary judgment by default for lack of an answer or response to the motion by the non-movant when the movant's summary judgment proof is legally insufficient. . . . Summary judgments must stand on their own merits, and the non-movant's failure to answer or respond cannot supply by default the summary judgment proof necessary to establish the movant's right.

City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979). Whether Nolan responded was thus irrelevant to whether FFS had carried its initial summary-judgment burden as a matter of law because only if FFS had done so would the burden have shifted to Lewis to answer and to raise a fact issue. Intricacies of summary-judgment burdens and procedure such as these are beyond the understanding of jurors, and expert testimony is needed to explain these matters.

More importantly, determining whether FFS actually carried its initial summary-judgment burden, and also whether its suit would have been meritorious as a matter of law, required expert testimony. We reach this conclusion even taking as true Lewis's affidavit testimony that the April 1987 note "was paid off after my then-partner [White] borrowed money[,] at which time [White] signed on to pay the second note." There were two notes, only one of which Lewis signed personally. FFS moved for summary judgment on the November 1989 note, which Lewis had not signed. Could Lewis have been liable on the November 1989 note, which he did not personally sign, (1) when Lewis admitted that the man who signed it (White) was his business partner; (2) when the April 1987 note that he did co-sign listed him, White, and "Baja Trax, Inc." as borrowers; and (3) when the November 1989 note listed "Bill White dba Baja Trax, Inc." as the borrower? Under what circumstances can a non-signatory to a note be legally liable for a note that his business partner signs for what may have been a joint business venture? These are legal questions, controlling of the collection suit's outcome and of FFS's summary-judgment motion, that only a legal expert can answer. Accordingly, Lewis needed to produce expert testimony to defeat Nolan's no-evidence summary-judgment motion on the issue of causation for his legal-malpractice claim. [fn. 3] See Alexander, 146 S.W.3d at 119-20; cf. F.W. Indus., Inc. v. McKeehan, 198 S.W.3d 217, 221 (Tex. App.–Eastland 2005, no pet.) (holding that expert testimony was required to prove causation in legal-malpractice suit based on attorney's having allowed dismissal for want of prosecution ("DWOP") of state-court suit because of attorney's failure to obtain lift of bankruptcy stay, to notify state court of bankruptcy's filing, or to appeal DWOP, among other matters).

[fn. 3] Lewis's summary-judgment affidavit recites that "I was not obligated to pay the [November 1989] note," "I did not owe any money on either of the notes," and "the judgment that was entered against me in [the collection suit] was improperly entered and was totally defensible." However, these averments are legal conclusions that do not constitute competent summary-judgment evidence. See Rizkallah v. Conner, 952 S.W.2d 580, 587 (Tex. App.—Houston [1st Dist. 1997, no pet.).

We distinguish some of the authority on which Lewis relies because, in it, the only issue was whether the attorney's faulty advice caused the client to make a bad decision that he would otherwise not have made. See Delp v. Douglas, 948 S.W.2d 483, 495-96 (Tex. App.–Fort Worth 1997), rev'd on other grounds, 987 S.W.2d 879 (Tex. 1999); Streber v. Hunter, 221 F.3d 701, 726-27 (5th Cir. 2000). A non-expert client can testify to whether he would have made a particular decision had his attorney not misled him. The issue in those cases was not whether an underlying lawsuit would have been meritorious had the attorney not committed a complained-of action within that lawsuit, as the issue here is.