Kuzmin v. Schiller
Dallas Court of Appeals, No. 05-13-01394-CV (January 8, 2015)
Justices Fillmore and Stoddart (Opinion)
Copeland v. Cooper
Dallas Court of Appeals, No. 05-13-00541-CV (January 7, 2015)
Justices Bridges, Lang-Miers (Opinion), and Myers
In two decisions issued on successive days last week, the Dallas Court of Appeals underscored the importance for a plaintiff to prove up all aspects of the “case-within-a-case” in a legal malpractice action. In one, Kuzmin, it reiterated the necessity of expert testimony to prove proximate cause. In the other, Copeland, the Court overturned the bulk of a large unliquidated damages award in a default case because the plaintiff failed to provide sufficient evidence to support causation or the amount of damages, even though the attorney’s negligence was deemed admitted by the default.
In Kuzmin v. Schiller, the Court reviewed a summary judgment in favor of the defendant attorney. The attorney, Schiller, formed a company called Gospel Television Management, Inc. (“GTMI”) of which he and his clients, Jimmy and Fay Jones, were directors and owners. Schiller approached another client, Kuzmin, who also invested. Eventually, disputes arose among the parties, and the Joneses agreed to buy Kuzmin out for $531,000. But the Joneses never paid. For several years, Schiller worked with Kuzmin and the Joneses, trying to resolve the situation, but without success. Kuzmin testified that Schiller never advised him about the statute of limitations on his potential claims against the Joneses. Eventually, Kuzmin filed a legal malpractice suit against Schiller, and Schiller filed a traditional and no-evidence motion for summary judgment.
In response to the summary judgment motion, Kuzmin filed an affidavit testifying that Schiller never told him to seek another attorney to advise him about the GTMI transaction and never pointed out any risks or pitfalls regarding the proposed transaction. Kuzmin also filed an affidavit from Ronald Reneker, an attorney expert, purporting to establish that Schiller was negligent in representing parties with conflicting interests, failing to provide Kuzmin with advice about the risks of the transaction, and failing to advise Kuzmin about the statute of limitations for any possible claims against the Joneses. Schiller objected to portions of the affidavit. The trial court sustained several of those objections and granted summary judgment in favor of Schiller.
On appeal, Kuzmin only challenged the trial court’s grant of summary judgment, and not its evidentiary rulings on the Reneker affidavit. The Court of Appeals therefore affirmed the summary judgment ruling, holding that Kuzmin had waived any error in the trial court’s decision to strike portions of the expert affidavit and that, without the stricken evidence, Kuzmin had no evidence that Schiller’s alleged negligence proximately caused Kuzmin’s injury. In other words, without the stricken expert testimony there was no evidence that, even if Schiller had advised Kuzmin to consult independent counsel, that counsel would have advised him against making the GTMI investment. In addition, the Court noted that the attorney expert had not opined that, had Kuzmin filed suit against the Joneses within the limitations period, he would have prevailed and would have been able to collect on his judgment. So Kuzmin had failed to raise a fact issue on the case-within-a-case. Therefore, any claim based on Schiller’s failure to advise Kuzmin about the statute of limitations failed.
In Copeland v. Cooper, the Court reversed the bulk of a default damages award because of the plaintiff’s failure to prove all claims in her case-within-a-case. In the underlying case, plaintiff Teresa Ward Cooper hired John Copeland to represent her in a discrimination lawsuit against the Dallas Police Association (“DPA”). Copeland filed an incomplete and untimely response to the DPA’s summary judgment motion in that underlying action, and the response was stricken after the DPA pointed out to the trial court that Copeland was suspended from the practice of law and was not eligible to file papers with the court. The trial court in the underlying case granted summary judgment against Cooper and in favor of the DPA. Cooper sued attorney Copeland for legal malpractice, fraud, and other claims.
Copeland failed to file an answer in the malpractice case, and Cooper secured a default judgment against him for $600,000 in economic damages, plus other damages. On appeal, however, Copeland argued that the evidence presented at the default prove-up hearing was insufficient to support the damages award. The Dallas Court of Appeals agreed. When a plaintiff obtains a no-answer default judgment on a claim for unliquidated damages, all factual allegations in the petition are deemed admitted except for the amount of unliquidated damages. Plaintiff “must prove the amount of actual damages and prove that the event sued upon caused the damages.” Copeland failed to provide this evidence. The Court found that she “presented no evidence that, but for Copeland’s failings, she could have presented evidence in the [underlying] case to overcome the motion for summary judgment” and that she would have ultimately prevailed in that case against the DPA. The Court therefore reduced Cooper’s economic damages to the $2500 she paid Copeland for his services.
These cases demonstrate that proof of an attorney’s negligence is not enough. A malpractice plaintiff must also demonstrate that the underlying case would have yielded a better result in the absence of that negligence.
