Many of us remember the old adage: “If at first you don’t succeed, try, try again.” Recently the Texas Supreme Court noted in Rogers v. Zanetti, 518 S.W.3d 394 (Tex. 2017): “Legal malpractice is a land of second chances.”
However, Rogers illustrates how difficult it can be to recover on a second chance. In Rogers, an investor sought to acquire a majority ownership interest in a home health care business. The investor retained a business attorney to draft an agreement to acquire a majority interest in the business from the founders. After the transaction closed, the investor did not follow through with his commitment to invest in the business, but instead acquired control of the accounts of the business and began transferring funds out of the business. The founders sued the investor who requested a recommendation from his business lawyer for a litigator to represent him in the lawsuit. The business lawyer recommended a litigator from his firm. The litigator represented the investor for a while. Later the litigator and the business lawyer withdrew after requesting the investor find new counsel which he did. In a jury trial, the jury decided that the founders had been defrauded, and the jury awarded almost $2.5 million in damages. The trial court declared the investment agreement void because it was procured by fraud, was unconscionable, and lacked consideration. The trial results were affirmed on appeal.
