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Civil Litigation No. 14-02-00513-CV, 4/17/2003. Click here for the full text of this decision FACTS: In this suit based on alleged legal malpractice, the trial court granted summary judgment in the attorney’s favor based on the affirmative defense of limitations. In three related issues, appellant claims the trial court erred in granting summary judgment. HOLDING: Reversed and remanded. The appellant, George Neil Lewis, hired attorney Jack Nolan to represent him in a suit filed against Lewis in Jasper County. On May 31, 1995, the Jasper County district court entered a judgment against Lewis; however, Lewis claims he did not learn about this judgment until May 2001. Lewis contends he discovered the judgment’s existence only when he tried to sell some land in Galveston County and was told that an abstract of the judgment had been filed. On June 13, 2001, Lewis filed suit against Nolan, alleging that Nolan failed to respond to a motion for summary judgment and that Nolan misled Lewis into believing the former suit would be dismissed. Lewis alleged claims for legal malpractice, negligent misrepresentation, Deceptive Trade Practice Act violations and breach of contract. Nolan filed a motion for summary judgment asserting only that Lewis’ claims are barred by limitations. Specifically, Nolan argued 1. the discovery rule did not apply to Lewis’s claims because his alleged injury was not inherently undiscoverable; and 2. Lewis had constructive notice of the judgment. Following an April 12, 2002 hearing, Nolan filed a legal brief in support of defendant’s motion for summary judgment, apparently in response to a question raised by the trial court about the following recitation contained in the Jasper County judgment: “On the 31st day of May, 1995, came on to be heard the above-entitled and numbered cause wherein Federated Financial Services Inc., is Plaintiff and George N. Lewis is the Defendant. The Plaintiff appeared by its attorney of record and announced ready for trial. The Defendant, appeared pro se.” In his post-hearing brief, Nolan argued that the court’s judgment unambiguously states that Lewis was present for the hearing on May 31, 1995, and that Lewis is prohibited, as a matter of law, from rebutting this statement. On April 25, 2002, the trial court granted Nolan’s motion for summary judgment and dismissed Lewis’ claims. Nolan initially claims that the discovery rule does not apply to Lewis’s claims because Lewis’ alleged injury – the existence of a judgment against him – was not inherently undiscoverable. See S.V. v. R.V., 933 S.W.2d 1 (noting that the discovery rule applies only to cases in which the alleged wrongful act and resulting injury are inherently undiscoverable). However, the Texas Supreme Court has clearly held that the discovery rule applies to legal-malpractice actions. Willis v. Maverick, 760 S.W.2d 642 (Tex. 1988). The court explained that imposition of the discovery rule in these cases is justified by the special relationship between an attorney and client: As a fiduciary, an attorney is obligated to render a full and fair disclosure of facts material to the client’s representation. The client must feel free to rely on his attorney’s advice. Facts that might ordinarily require investigation likely may not excite suspicion where a fiduciary relationship is involved. Thus, as the court further explained in S.V., because of the fiduciary relationship between attorney and client, an attorney’s alleged misconduct is considered inherently undiscoverable. When a defendant in a legal-malpractice action moves for summary judgment based on the affirmative defense of limitations, that party has the burden of 1. showing when the claim accrued; and 2. negating the discovery rule by proving as a matter of law that there is no genuine issue of fact about when the plaintiff discovered or, in the exercise of reasonable diligence, should have discovered the facts establishing the cause of action. In his motion for summary judgment, Nolan claims Lewis had constructive notice of the judgment based on 1. the entry of judgment by the trial court; and 2. five separate abstracts of judgments that were filed in three different counties over a five-year period following the entry of judgment. Nolan first argues that Lewis had constructive notice of the judgment itself, and therefore limitations began to run from that date. In support of this argument, Nolan relies on the frequently cited proposition that a party to a lawsuit is charged by law with notice of all orders and judgments rendered in that suit. The court notes, however, that courts do not blindly apply this rule in cases where notice is a contested issue. Significantly, the court has found no case where a court applied this rule in the context of a dispute between a party and his lawyer involving the handling of the lawsuit. Lewis states in his affidavit that Nolan told him “there was no need for me to do anything else and if anything came up or needed to be done [Nolan] would contact me.” It is counterintuitive to suggest that an attorney who makes such representations should then be protected from potential malpractice claims by a legal presumption that the client had notice of the final judgment against him. Next, Nolan claims the filing of abstracts of judgment constituted constructive notice of the judgment as a matter of law. The first two abstracts were filed in Harris and Montgomery counties in August 1995. Thus, Nolan argues that Lewis discovered his claim as a matter of law no later than August 1995, making his lawsuit untimely. The court disagrees. Under the Texas Property Code, a properly recorded instrument “is notice to all persons of the existence of the instrument.” In Ojeda de Toca v. Wise, 748 S.W.2d 449 (Tex. 1988), the Texas Supreme Court addressed the question of whether fraud and DTPA claims were barred as a matter of law because the defendants’ alleged deception would have been discovered from an examination of the county records. The court concluded that recording statutes such as �13.002 serve a distinct purpose: to protect a good faith purchaser “against the evils of secret grants and secret liens.” The court further noted that “Texas courts have never held that a purchaser’s failure to search the deed records would bar his fraud action against the seller.” Accordingly, the court held that the existence of a recorded instrument that would have disclosed the defendants’ deception did not relieve the defendants of liability for fraud or DTPA violations. Applying the rationale in Ojeda de Toca, at least two courts of appeals have concluded that, despite the fact that a properly recorded instrument revealed the existence of a plaintiff’s DTPA claim, summary judgment was not appropriate under the DTPA’s version of the discovery rule. The court agrees with the reasoning of these cases and holds that the mere recording of abstracts of judgment is insufficient to establish as a matter of law that Lewis discovered or should have discovered the facts establishing his claim. Nolan relies heavily on the Texas Supreme Court’s opinion in HECI Exploration Co. v. Neel, 982 S.W.2d 881 (Tex. 1998), to support his contention that the judgment itself and the properly recorded abstracts provided Lewis with constructive notice as a matter of law. However, the issue in HECIwas whether the plaintiff’s injury was inherently undiscoverable and thus whether the discovery rule applied. In this case, there is no question that the discovery rule applies. The issue in this case is whether the entry of judgment and the filing of abstracts established constructive notice as a matter of law to trigger the running of the limitations period. As the HECIcourt specifically notes, “when the rationale for imposing constructive notice is lacking, public records have not been held to create an irrebuttable presumption of notice.” Given the fiduciary nature of the attorney-client relationship and the representations allegedly made by Nolan, the court concludes that the rationale for imposing constructive notice in this case is lacking. Thus, it cannot say, as a matter of law, that Lewis knew or should have known of the judgment entered against him more than two years before this lawsuit was filed. OPINION: Yates, J; Yates, Anderson and Fowler, JJ. Anderson, J. concurring in result only.

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