X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
For years, Texas courts grappled with the perceived special treatment that lawyers receive in legal malpractice cases. One particular source of criticism has been the application of the statute of limitations to legal malpractice claims. In 1991′s Hughes v. Mahaney & Higgins, the Texas Supreme Court hoped to quell that criticism by tolling limitations in certain instances. Hughesheld that the statute of limitations on a legal malpractice claim is tolled until all appeals on the underlying claim are exhausted. The basis for this holding lays in the inherently inconsistent position which a client might have to adopt should he be forced to continue to litigate the underlying matter at the same time that he files suit against his attorney for malpractice related to that identical litigation. In that situation, the viability of the malpractice action often depends upon the outcome of the underlying litigation. For these reasons, limitations related to the malpractice action are tolled until the conclusion of the underlying litigation. In conjunction with Hughes, the Texas Supreme Court in 1991 issued a companion opinion in Aduddell v. Parkhill. In Aduddell, the plaintiff sued his lawyer alleging legal malpractice and violations of the Deceptive Trade Practices Act. The suit was filed within six months of the final adjudication of the underlying litigation but more than three years after the allegedly negligent act. The trial court granted defendant’s summary judgment based upon limitations; the appellate court affirmed. The Texas Supreme Court, applying Hughesto all claims, reversed the decision. This decision created the appearance that Hughesapplied universally to common law and statutory causes of action. In 1997′s Murphy v. Campbell, a shadow was cast across the bright-line Hughesrule. In Murphy, the Texas Supreme Court refused to extend Hughesto malpractice cases involving accounting experts. The basis for the holding was that, unlike lawyers, accountants (who were testifying in a related tax suit as experts) would not be placed in an untenable position because it is not unreasonable to expect an expert to testify consistently even if it is being sued by its client. Further, the accounting malpractice action could be simply abated. The court concluded by stating that Hughes“is expressly limited to claims against a lawyer arising out of litigation where the party must not only assert inconsistent positions but must also obtain new counsel.” This sentence caused appellate courts to question the clarity of Hughesfor the next four years. Over the next four years, a majority of appellate courts interpreted Murphyto narrow Hughes. At least six separate appellate courts held that Murphybarred the application of Hughesto situations in which a party obtains new counsel. In 2001, the Texas Supreme Court addressed the growing ambiguity regarding Hughes. In Apex Towing Co. v. Tolin, the court reaffirmed Hughesand expressly stated that Murphydid not modify it. To end any remaining ambiguity, the court restated the rule as follows: “When an attorney commits malpractice in the prosecution or defense of a claim that results in litigation, the statute of limitations on a malpractice claim against that attorney is tolled until all appeals on the underlying claim are exhausted or the litigation is otherwise finally concluded.” The Apexcourt reaffirmed Hughes, reasoning that the hiring of new counsel would not necessarily end the risk that a client must adopt inconsistent positions in the underlying litigation and the malpractice case. The court also provided several other bases for its holding. The court noted that following Murphywould have led to a different result based upon the facts presented in Hughes. Further, the court observed that even the Murphydecision stated that Hugheswas restricted to the circumstances presented; those facts did not include continued representation by the allegedly malpracticing lawyer. Finally, the court emphasized that a “clear and strict application” of Hughes‘ bright-line rule is necessary to bring predictability and consistency to Texas jurisprudence. Lower courts should not re-examine whether the policy behind the rule fits each different fact situation; if the factual situation falls within the definition of the rule, then Hughesshould be applied. This holding appears to clearly require strict interpretation of the rule. MORE QUESTIONS In a companion case, Underkofler v. Vanasek, the court in 2001 revisited its decision in Aduddell, which arguably extended Hughesto DTPA claims. In relevant part, the Texas Supreme Court overruled Aduddelland held that Hughes, a common-law rule, cannot be applied to DTPA claims. The basis for this holding is that the Texas Legislature adopted only two statutory exceptions (the discovery rule and fraudulent concealment) to the general rule that limitations begin to run on the date the wrongful act occurred. The court refused to “rewrite the statute” and add a third exception to the statute of limitations for DTPA claims. The effect of Underkofleris to require an aggrieved party to file its DTPA claim even if it requires that party to take an inherently inconsistent position in ongoing litigation. Though it appears that the Texas Supreme Court desired to put an end to questions regarding Hughes, additional issues already are emerging. In Brents v. Haynes and Boone, the 5th Court of Appeals in Dallas addressed the issue of whether Hughesshould be extended beyond the conclusion of the initial litigation to the conclusion of the threatened subsequent litigation (raised by the initiation of an administrative investigation). Reiterating that Hughesand Apexset a “bright-line rule,” the appellate court declined to broaden the definition of “litigation” to include an administrative investigation that may later result in a suit. The court held that doing so would “extend the equitable tolling principle beyond that contemplated in Hughes.” Undeniably, Brentswill not be the last attempt to explore the outer bounds of Hughes. Further, Underkofleronly will add fuel to the fire regarding alleged special treatment that lawyers receive before Texas courts. However, due to the Texas Supreme Court’s restrictive interpretation of Hughes, it appears likely that appellate courts will restrict themselves to a “clear and strict” interpretation. Robert Browning is a senior associate with Houston’s Davis, Oretsky & Guilfoyle, www.dogpc.com, and specializes in legal malpractice and grievance defense. His e-mail address is [email protected]. Matthew Guilfoyle is a partner in the firm and specializes in legal malpractice and grievance defense. His e-mail address is [email protected].

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.