LEGAL MALPRACTICE CLAIMS AGAINST CRIMINAL-DEFENSE ATTORNEYS: SCOTX CLARIFIES LIMITATIONS AND THE “EXONERATION” REQUIREMENT OF PEELER v. HUGHES & LUCE

Gray v. Skelton
Supreme Court of Texas, No. 18-0386 (February 21, 2019)
Opinion by Justice Devine (linked here), dissent by Justice Blacklock (linked here)
About 25 years ago, a plurality of the Supreme Court of Texas declared in Peeler v. Hughes & Luce that a party who had been convicted of a criminal offense had to be “exonerated” on direct appeal or otherwise in order to bring a malpractice claim against the attorney who represented that party in the criminal case. But what did it mean to be “exonerated”? “Legal” innocence—i.e., just having the conviction set aside? “Actual” innocence? For more than two decades, the Court did not revisit the issue. Or specify how and when such a party could obtain or demonstrate “exoneration.” Or explain how the statute of limitations operates with respect to such a malpractice claim. In its 6-3 decision in Gray v. Skelton, the Court reaffirmed and solidified Peeler and answered those questions, providing needed clarification but likely expanding the prospect for legal malpractice claims to be brought against criminal-defense attorneys.

When Skelton, an estate planning attorney, found the original of a client’s will to be water-damaged and illegible, she printed a new copy from her electronic files and then cut and pasted onto that copy the signature portions of the water-damaged original, made a copy, and filed that copy with the probate court. For that, she was convicted of criminal forgery in 2007. Her appeal failed. Meanwhile, in a will contest in probate court, a jury found the composite will filed by Skelton was an accurate copy of the original and also found she did not intend to defraud or harm anyone by the filing of that composite. In the wake of these findings, Skelton sought to have her conviction set aside through habeas corpus, based in part on the ineffective assistance of Gray, her lawyer in her criminal case. The Fourth Court of Appeals granted Skelton the requested habeas relief, vacating her conviction because “the fundamental fairness of her trial was tainted by the ineffective assistance of her trial counsel,” without addressing her “actual” guilt or innocence.

Skelton then filed a legal malpractice lawsuit against Gray. The trial court dismissed Skelton’s claim, finding she had not proven “exoneration” as required by Peeler—apparently because she had not secured a ruling that she was “actually innocent” rather than “legally innocent” of the charge on which she had been convicted. The Fourth Court of Appeals, however, reversed that dismissal. It held that, because Skelton’s conviction had been vacated by the time she sued Gray, Peeler simply did not apply. And it went on to rule that her claim was not barred by limitations, which had been tolled until her conviction was vacated on habeas appeal (because it would have been barred by Peeler until then), and remanded the case for trial.

The Supreme Court affirmed, with a twist. It reaffirmed Peeler’s requirement that a former criminal defendant must be “exonerated” before he or she can recover against his or her criminal-defense attorney for legal malpractice. The Court then filled in the gap left by Peeler, explaining that “exoneration” has two parts. First, the former criminal defendant must have his or her conviction vacated on appeal or otherwise, e.g., through a habeas petition. But then, second, the former criminal defendant must also establish his or her “actual innocence”—not merely “legal innocence” (i.e., having the conviction vacated). This second criterion can be satisfied in the criminal appeal or habeas proceeding, if the conviction is set aside on grounds of actual innocence. But the Court rejected arguments both (1) that the presumption of innocence alone, restored after a conviction is vacated suffices to prove “actual innocence,” and (2) that actual innocence must be established in the criminal or habeas proceeding, before the claimant can initiate a malpractice lawsuit. Instead, the Court said, former criminal defendants may commence their malpractice lawsuits once their convictions are set aside, but “must obtain a finding of their innocence as a predicate of the submission of their legal malpractice claim.” That is, “[s]ubmission of the traditional elements of legal malpractice to the factfinder should … be conditioned on an affirmative finding that the malpractice plaintiffs are innocent of the crime of which they were formerly convicted.” The Court placed the burden on the claimant to prove innocence by a preponderance of evidence. This, of course, is the opposite of the situation in the criminal case, where the State had to prove guilt beyond a reasonable doubt, and it diverges from the approach taken by some other states that allow the criminal-defense lawyer to raise the former client’s guilt as a defense, thereby placing the burden for this issue on the lawyer rather than the claimant.

The Supreme Court also held the two-year statute of limitations for malpractice claims would not bar Skelton’s lawsuit. The Court ruled that under the “Hughes tolling rule”—which tolls limitations on legal malpractice claims until all appeals have ended in the case in which the alleged malpractice occurred—limitations for malpractice claims of this sort are to be tolled during all direct appeals and during the pendency of all habeas proceedings (sort of a “chess-clock” approach, where the limitations clock stops during the direct appeals, starts again when those appeals end, then stops again during any habeas proceeding(s)).

Justice Blacklock, joined by Justices Green and Bland, dissented on the limitations issue, finding the extension of the Hughes tolling rule to include habeas proceedings to be an unwise expansion of this judge-made doctrine. The dissent noted that, because a criminal defendant may file multiple habeas petitions in both state and federal courts, “a litigious convict can keep the habeas corpus ball in the air almost indefinitely, leaving criminal defense lawyers under the shadow of potential malpractice claims for many years beyond the two-year period envisioned by the Legislature.” Because the dissenting justices would have reversed on limitations grounds, they expressly declined to address the “exoneration” issue and procedures.

In sum, Skelton has satisfied the first prong of the “exoneration” requirement and will now have the chance to try to meet the second, actual-innocence prong, and then perhaps to pursue her legal malpractice claim on the merits

Print