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Amid widespread confusion over when the clock starts ticking on the deadline for filing a legal malpractice claim, the Texas Supreme Court has agreed to review two cases dealing with the thorny issue. By law, a client who believes he has been legally injured because his attorney mishandled a case has two years to file a malpractice claim. But the statute of limitations is tolled in certain circumstances when the claim involves a case in litigation. Appeals courts around the state of Texas have taken conflicting positions on when tolling is triggered, leaving attorneys and clients unsure of what their rights are. “There’s plenty of confusion,” says Charles Herring Jr., an expert in legal malpractice and lawyer ethics and a partner in Austin’s Herring & Irwin. “The [Texas Supreme] Court needs to go back and clarify the law.” On June 15, the court granted petitions for review in Paul B. Underkofler Jr., et al. v. Hugh F. Vanasek from Dallas County and Apex Towing Co., et al. v. William M. Tolin III, et al. from Jefferson County. The court has not set the date for the cases to be submitted. Although the cases involve different factual situations, they share two common issues, according to Vanasek attorney Robert Lybrand, a partner in Turner & Lybrand in Coppell, Texas. Lybrand says both cases raise questions about when the statute of limitations begins running in legal malpractice cases involving litigation and whether a ruling can be applied retroactively. The tolling rule adopted by the state Supreme Court in 1991′s Hughes v. Mahaney & Higgins has been “the law of the land” for some time, says Apex attorney John Glover, a partner in Houston’s Chamberlain Hrdlicka White Williams & Martin. The rule tolls the statute of limitations on a malpractice claim until all appeals in the underlying case have ended so that a plaintiff won’t have to take inconsistent positions by asserting that his attorney acted properly on the one hand and improperly on the other. Glover says some appeals courts are following the Hughes tolling rule, while others are ruling based on the Supreme Court’s 1997 decision in Murphy v. Campbell, an accounting malpractice case. In the Murphy decision, the court narrowed the Hughes rule by saying that the timeline for filing a malpractice claim begins when the plaintiff knew or reasonably should have known that he had been injured by his attorney’s action. “The question that the Supreme Court is going to try to answer is, ‘What did Murphy do to Hughes?’” Lybrand says. KNOW YOUR LIMITATIONS Murphy came out three years after Lybrand’s client, Vanasek, filed his malpractice claim. In April 1994, Vanasek sued the firm of Goins, Underkofler, Crawford & Langdon for allegedly mishandling litigation involving a promissory note. Court documents indicate Vanasek became dissatisfied with Underkofler in June 1991 and criticized the attorney until he withdrew from the case in April 1992. Vanasek continued the litigation with a different attorney and, on the advice of the second attorney, accepted a settlement that provided him $12,500 in cash from several defendants and a judgment worth about $858,260 against two others who had filed for bankruptcy protection. Vanasek alleges that Underkofler agreed to recess the trial and submit the case to mediation without his consent and that the lawyer’s decision caused delays in the case that led to the unsatisfactory settlement. Without specifying its reasons, the 101st District Court granted Underkofler’s motion for summary judgment. In a 2-1 decision, the 5th Court of Appeals in Dallas reversed the lower court, holding that the statute of limitations was tolled during the period after Underkofler withdrew and while Vanasek continued litigating the case with another attorney. While there was no appeal in the case, the 5th Court held that the “exhaustion of appeals” rule stated by the Supreme Court in Hughes applies whenever it would promote judicial economy. Underkofler did not return a call seeking comment. His attorney, Robert Gilbreath of Jenkens & Gilchrist in Dallas, declines to comment and refers to the brief filed for the appeal. The brief states: “By resting tolling on broad, unprincipled notions of ‘judicial economy,’ the court of appeals gives equitable tolling unlimited scope based on criteria largely in the eye of the beholder. The court repudiated the principle that judicial economy is best served by barring stale claims.” In Apex Towing, Apex sued Tolin and his firm, Benckenstein & Oxford of Beaumont, Texas, for allegedly failing to file a limitation of liability action in the defense of a personal-injury suit. Apex was sued by a worker who was injured when he fell from a vessel caught in the wash of a barge being towed by a tugboat allegedly owned by the company. Apex initially hired Benckenstein & Oxford to handle the matter but hired the New Orleans-based firm of Hebert, Mouledoux & Bland as lead counsel for the trial. Hebert, Mouledoux also is a defendant in the malpractice claim, which Apex first filed and withdrew in Louisiana before bringing the matter to a Texas court. Mike Jamail, attorney for the Louisiana firm and a partner in the Reaud Law Firm in Beaumont, alleges that Apex filed the suit in Louisiana to try to get his clients to testify against Benckenstein & Oxford. When that didn’t work, Apex filed the suit in Texas after the statute of limitations had expired, Jamail alleges. “They missed the filing date, pure and simple,” he says. The irony in this case, Jamail alleges, is that Apex could have settled the suit for $1 million at the trial court level but didn’t. After the worker won a more than $7 million judgment against Apex, the company hired another attorney to negotiate a settlement. Apex alleges that mistakes by its former attorneys forced it to pay $1.7 million more in damages than its tugboat was worth. The 58th District Court in Beaumont granted Tolin’s motion for summary judgment because the statute of limitations had run out, and the 9th Court of Appeals affirmed. The 9th Court in Beaumont held that Apex suffered a legal injury no later than Aug. 31, 1994, when the trial court signed the judgment against the company. Apex didn’t file the malpractice claim until Feb. 19, 1997. According to the 9th Court, the Supreme Court’s decision in Murphy narrowed the tolling rule to situations in which the client continues to use the same lawyer. Sam Cruse Jr., a partner in Houston’s Cruse Scott Henderson & Allen and Tolin’s attorney, says the tolling policy stated in Murphy became applicable in this case when Apex hired a new lawyer. “We want them [the Supreme Court] to affirm the Court of Appeals and the trial court,” Cruse says. Glover, Apex’s attorney, says some appeals courts have said the Murphy decision applies to lawyers, but others have said it doesn’t. Plaintiffs in legal malpractice cases are entitled to know when they must file their claims, he says. David A. Furlow, a partner in Houston’s Morris & Campbell, sums up the dilemma faced by businesses in an amicus brief written on behalf of Anchor Operating Co. in support of Apex. The brief notes: “As Clint Eastwood once observed, ‘A man’s got to know his own limitations.’ The same principle holds true for a business with a potential claim of legal malpractice against an attorney — that client must know ‘his own limitations,’ that is the date on which the two-year statute of limitations ceases to be tolled and begins to run.”

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