Opinion
No. 05-19-00162-CV
05-22-2020
Youval ZIVE, Appellant v. Jeffrey R. SANDBERG and Palmer & Manuel, P.L.L.C. f/k/a Palmer & Manuel, L.L.P., Appellees
Emil Lippe, Jr., Law Offices of Lippe & Associates, Merit Tower 12222 Merit Drive, Ste. 1200, Dallas, TX 75251, Dallas, for Appellant. Alison H. Moore, Cassie Dallas, Thompson Coe Cousins & Irons, L.L.P., Plaza Of The Americas, 700 N Pearl Street, Fl. 25, Dallas, TX 75201-1853, Dallas, for Appellees.
Emil Lippe, Jr., Law Offices of Lippe & Associates, Merit Tower 12222 Merit Drive, Ste. 1200, Dallas, TX 75251, Dallas, for Appellant.
Alison H. Moore, Cassie Dallas, Thompson Coe Cousins & Irons, L.L.P., Plaza Of The Americas, 700 N Pearl Street, Fl. 25, Dallas, TX 75201-1853, Dallas, for Appellees.
Before Justices Bridges, Whitehill, and Nowell
OPINION
Opinion by Justice Whitehill
1 Under the Hughes tolling rule, "[w]hen 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." Apex Towing Co. v. Tolin, 41 S.W.3d 118, 119 (Tex. 2001) (reaffirming Hughes v. Mahaney & Higgins, 821 S.W.2d 154 (Tex. 1991) ).
In this case, the client, Youval Zive, stopped appealing the adverse judgment in the underlying case once the Texas Supreme Court denied his petition for review, but another party in the same case unsuccessfully pursued a writ of certiorari in the United States Supreme Court. Zive later sued his lawyer in the underlying case for legal malpractice.
No one disputes that the Hughes rule tolled limitations for Zive's malpractice claim until Zive's petition for review was finally resolved. The pivotal question is whether Hughes continued to toll limitations for Zive until the Supreme Court denied the other party's certiorari petition. We hold that it did not and accordingly affirm the trial court's take-nothing summary judgment against Zive.
I. Background
A. The Underlying Case
We draw the following facts from Zive's live pleading and from appellees' summary judgment evidence, which includes our opinion in the underlying case. See Grapevine Diamond, L.P. v. City Bank, No. 05-14-00260-CV, 2015 WL 8013401 (Tex. App.—Dallas Dec. 7, 2015, pet. denied) (mem. op.), cert. denied, ––– U.S. ––––, 137 S. Ct. 250, 196 L.Ed.2d 136 (2016).
1. Underlying Facts and Trial Court Proceedings
In roughly 2007, Zive invested in real estate in Grapevine, Texas. Grapevine Diamond, L.P. acquired the property, and City Bank loaned the purchase money. Zive guaranteed the loan.
The loan went into default, and the property was sold in a foreclosure sale. Zive alleged that irregularities in the sale caused a sale for substantially less than the outstanding indebtedness.
City Bank sued Zive and another guarantor, Nasser Shafipour, on their guaranties. Id. at *2. Shafipour asserted third-party claims against Grapevine Diamond and the property's seller, Jonathan Aflatouni. Id. Grapevine Diamond and Aflatouni in turn cross-claimed against City Bank for wrongful foreclosure. Id. Aflatouni was represented by appellees Jeffrey R. Sandberg and his law firm. Zive hired appellees to represent him in the litigation as well. Shafipour was eventually dismissed from the suit. Id.
A conflict of interest between Aflatouni and Zive arose after a failed mediation, and Sandberg moved to withdraw as Zive's attorney. The trial court granted the withdrawal motion. A few months later, a new lawyer appeared in the case for Zive.
In January 2014, the trial court rendered summary judgment for City Bank. Id. Grapevine Diamond, Aflatouni, and Zive appealed to this Court.
2. The Underlying Appeal
In November 2015, we issued an opinion and judgment. On December 7, 2015, we withdrew our opinion and judgment, and we issued a new opinion and judgment affirming the trial court's summary judgment. Id. at *1.
Aflatouni timely moved for en banc reconsideration, which we denied.
Zive and Aflatouni filed separate petitions for review in the Texas Supreme Court, both of which the supreme court denied on April 1, 2016.
Zive made no further filings in the underlying case. But Aflatouni filed a certiorari petition in the United States Supreme Court, and the Court denied it on October 3, 2016.
B. Procedural History of This Case
On October 1, 2018, Zive sued appellees for legal malpractice and fiduciary breach based on their conduct in the underlying case. Zive alleged that he lost that case because appellees negligently and improperly (i) responded to City Bank's request for disclosures, (ii) described the deficiencies in the foreclosure, and (iii) prepared Zive's affidavit about the property's value.
Appellees answered and moved for summary judgment, arguing that Zive's claims were barred by limitations and Zive's fiduciary breach claim was also barred by the anti-fracturing rule.
Zive responded without filing any summary judgment evidence.
After a hearing, the trial court rendered a take-nothing summary judgment against Zive, and he timely appealed.
II. Issues Presented
Zive presents two issues:
1. Was the statute of limitations tolled during the pendency of the petition for writ of certiorari filed by Appellee on behalf of another party to the same judgment as Appellant, since the relief sought in such petition would have vacated the judgment which was adverse to both parties?
2. Does application of the Hughes rule turn on whether or not the plaintiff which was the victim of the legal malpractice is continuing to pursue the litigation himself, or does it apply as long as any party [is] continuing to prosecute the case in a manner that will also benefit the malpractice plaintiff?
(Footnote omitted.) Zive argues the issues together, and they distill to a single question: Did appellees conclusively prove that Zive's legal malpractice claim was time-barred despite the Hughes rule where a different party continued his case to a conclusion less than two years before Zive sued appellees?
Zive's brief doesn't mention Zive's fiduciary breach claim or address the independent summary judgment ground attacking it, so we affirm the judgment as to that claim. See Ontiveros v. Flores, 218 S.W.3d 70, 71 (Tex. 2007) (per curiam) ; Malooly Bros., Inc. v. Napier, 461 S.W.2d 119, 121 (Tex. 1970).
III. Analysis
A. Standard of Review
2 We review a summary judgment de novo. Knopf v. Gray, 545 S.W.3d 542, 545 (Tex. 2018) (per curiam).
345 When we review a traditional summary judgment in favor of a defendant, we determine whether the defendant conclusively disproved an element of the plaintiff's claim or conclusively proved every element of an affirmative defense. Ward v. Stanford, 443 S.W.3d 334, 342 (Tex. App.—Dallas 2014, pet. denied). If a summary judgment motion is based on limitations, the defendant must conclusively establish every element of that defense, including when the claim accrued. Schlumberger Tech. Corp. v. Pasko, 544 S.W.3d 830, 833–34 (Tex. 2018) (per curiam). The defendant must also conclusively negate application of the discovery rule and any pled tolling doctrines. Erikson v. Renda, 590 S.W.3d 557, 563 (Tex. 2019).
6 We take evidence favorable to the nonmovant as true, and we indulge every reasonable inference and resolve every doubt in the nonmovant's favor. Ortiz v. State Farm Lloyds, 589 S.W.3d 127, 131 (Tex. 2019).
B. Applicable Law
789 The statute of limitations is an affirmative defense. Tex. R. Civ. P. 94. To avoid the defense, the plaintiff must file suit within the limitations period and use due diligence to have the defendant served with process. See Gant v. DeLeon, 786 S.W.2d 259, 260 (Tex. 1990) (per curiam). The primary purpose of limitations statutes is to prevent litigation of stale or fraudulent claims. Erikson, 590 S.W.3d at 569. Because it is the legislature's prerogative to establish limitations statutes, "judicial exceptions to limitations statutes cannot be undertaken lightly." Id.
1011 Legal malpractice claims have a two-year limitations period. Willis v. Maverick, 760 S.W.2d 642, 644 (Tex. 1988). The discovery rule applies to legal malpractice claims, so such a claim accrues when the claimant discovers or reasonably should have discovered the facts establishing the claim's elements. Id. at 643.
In 1991, the supreme court adopted a tolling rule for some legal malpractice claims: "[W]hen an attorney commits malpractice in the prosecution or defense of a claim that results in litigation, the statute of limitations on the malpractice claim against the attorney is tolled until all appeals on the underlying claim are exhausted." Hughes v. Mahaney & Higgins, 821 S.W.2d 154, 157 (Tex. 1991).
The Hughes court identified two policy reasons for its tolling rule.
First, denying tolling in the Hughes situation could "force the client into adopting inherently inconsistent litigation postures in the underlying case and in the [legal] malpractice case." Id. at 156. Consistent with this policy, the supreme court has further observed that "attorney–client trust would be eroded if the client had to scrutinize every stage of the case for possible misstep[s]." Erikson, 590 S.W.3d at 565 (footnote omitted).
Second, the legal malpractice claim's viability depends on the underlying case's outcome. Hughes, 821 S.W.2d at 157.
In Apex Towing, the supreme court later held that Hughes tolling does not end simply because the client hires new counsel or settles the case. 41 S.W.3d at 121–22. Apex Towing also clarified that the tolling period lasts "until all appeals on the underlying claim are exhausted or the litigation is otherwise finally concluded." Id. at 119 (emphasis added). It further held that the Hughes rule applies to all cases factually matching the Hughes paradigm, regardless of whether the underlying policy reasons are implicated in the particular case. Id. at 122.
C. Does Hughes tolling continue after the legal malpractice claimant stops prosecuting appeals in the underlying case if another party continues to appeal?
12 No, because (i) once the client stops prosecuting the underlying case there is no longer any danger that the client must take inconsistent positions in the underlying case and the legal malpractice case and (ii) the other party's continuing appeal generally will not affect the legal malpractice claim's viability.
Zive does not dispute that his claims accrued more than two years before he sued appellees. He argues only that the Hughes doctrine tolled limitations until Aflatouni's certiorari petition was resolved.
We start with the language of Hughes and Apex Towing , see Erikson, 590 S.W.3d at 566 (although we do not usually parse judicial opinions like statutes, the exercise is useful in applying the Hughes doctrine), neither of which involves our specific facts. Hughes says that tolling lasts "until all appeals on the underlying claim are exhausted." 821 S.W.2d at 157.
Here, Zive argues that Aflatouni's certiorari petition was such an appeal because Aflatouni sought to set aside the judgment that injured Zive. But Hughes's reference to "the underlying claim" more reasonably means the underlying claim asserted by or against the legal malpractice plaintiff, in which case Aflatouni's certiorari petition would not toll limitations because it was not an appeal "on [City Bank's] underlying claim" against Zive. This reading is supported by footnote six, in which the Hughes court held that tolling ended when the supreme court overruled the Hugheses' motion for rehearing "because the last action of right that they could take and did take on the underlying case was concluded on that date." Id. at 158 n.6 (emphasis added). Here, the last action that Zive took in the underlying case was filing a petition for review, which the Texas Supreme Court denied more than two years before Zive sued appellees.
Apex Tolling added a new part to the Hughes rule: tolling lasts "until all appeals on the underlying claim are exhausted or the litigation is otherwise finally concluded." 41 S.W.3d at 119 (emphasis added). Although one could argue that the entire underlying case was not finally concluded until the Supreme Court denied Aflatouni's certiorari petition, our fact pattern was not before the Apex Towing court, and Zive's case ended when he did not timely file a rehearing motion in the Texas Supreme Court or a certiorari petition in the United States Supreme Court.
And it appears from context that the Apex Towing court added the new part to the Hughes rule to address a different question: when does tolling end if a case settles on date one but is not formally resolved by judgment or dismissal until subsequent date two? The court noted that the parties actually disputed the settlement's date, id. at 122, and it adopted the seemingly bright-line rule of when the litigation is "finally concluded," id. at 119. But it had no reason to decide, and did not explicitly address, whether litigation is "finally concluded" as to a party for Hughes purposes when that party abandons further appeals despite another party's decision to fight on. Thus, we do not read Apex Towing to settle the question in Zive's favor.
Finding no other authorities on point, we consider the policy rationales for the Hughes rule for guidance.
Although Apex Towing instructs us not to consider these policy rationales in determining whether the Hughes rule applies, see 41 S.W.3d at 122, it does not forbid us from considering those policies when determining how the Hughes rule applies once it has been triggered. Cessante ratione legis, cessat ipsa lex. Wright's Adm'x v. Donnell , 34 Tex. 291, 306 (Tex. 1871) ("[W]hen the reason of the rule fails, the rule itself should cease.").
13 The first policy reason is that a client should not be forced into the untenable position of suing its attorney while potentially still defending the attorney's conduct in the underlying case. See Hughes, 821 S.W.2d at 157. This reason evaporates once the client has stopped prosecuting the underlying case, since the client then becomes free to sue its lawyer without fear of self-contradiction. The related policy of freeing the client from the need to scrutinize its attorney at every stage of the underlying case for possible missteps, see Erikson, 590 S.W.3d at 565, likewise disappears once the client stops prosecuting the underlying case. So the first policy reason does not support applying the Hughes rule to this case's facts.
1415 The other policy reason for Hughes tolling is that "the viability of the [legal malpractice] cause of action depends on the outcome of the first," i.e., the underlying litigation. Hughes, 821 S.W.2d at 157. Zive argues that this policy is implicated here because Aflatouni's Supreme Court appeal, if successful, would have benefited Zive by voiding the foreclosure sale and reversing the adverse summary judgment and damages that appellees' malpractice allegedly caused. In other words, he contends that his legal malpractice claim's viability depended on the outcome of Aflatouni's Supreme Court appeal.
Appellees argue that Zive forfeited this specific argument by not raising it in the trial court. We disagree. Zive's summary judgment response argued that Hughes tolling applies to these facts. He is allowed to present new arguments on appeal supporting that position. See Greene v. Farmers Ins. Exch. , 446 S.W.3d 761, 764 n.4 (Tex. 2014).
16 Appellees dispute Zive's contention, noting the general rule that an appellate reversal favoring an appealing party does not justify reversing the judgment as to other parties who did not appeal. See, e.g., Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 446 (Tex. 1989). But there is an exception to that rule when the rights of the appealing and non-appealing parties are so intertwined or dependent on each other as to require the entire judgment be reversed. Id.
17 Because a party who does not appeal generally does not benefit from a reversal favoring some other party, another party's appeal generally will not affect the viability of the non-appealing party's legal malpractice claim. Accordingly, we conclude that the second Hughes policy generally does not justify extending Hughes tolling through appeals pursued by other parties after the client stops appealing the underlying case.
Here, although Aflatouni and Zive were aligned on the question of whether the foreclosure sale was proper, see Grapevine Diamond , 2015 WL 8013401, at *1, they were attempting to protect separate and independent interests that were allegedly damaged by the sale, so this does not seem to be an exceptional case in which Aflatouni's certiorari petition could have benefited Zive.
Finally, the Hughes doctrine is intended to be a "narrowly defined rule with established boundaries," Erikson, 590 S.W.3d at 564, so we seek a bright-line rule that can be applied generally. That is achieved by holding that Hughes tolling stops once the client stops appealing the underlying case.
For all these reasons, we hold that Hughes tolling stopped when the Texas Supreme Court denied Zive's petition for review in the underlying case.
Based on our holding, we further hold that appellees conclusively proved that Zive's legal malpractice claim was time-barred. Accordingly, we overrule Zive's issues.
IV. Disposition
We affirm the trial court's judgment.
Schenck, J., dissenting from decision not to consider this case en banc
OPINION DISSENTING FROM DECISION NOT TO CONSIDER THIS CASE EN BANC
Opinion by Justice Schenck
My colleagues have done a thorough and fine job in setting a rule to govern this previously unencountered wrinkle in the Hughes tolling rule. I suggested en banc consideration and issue this separate opinion because I believe the Court's decision does not afford the parties the clear start that is essential to a fair and predictable application of the limitations bar in cases where some, but not all, of the claims and parties in a case continue through the appellate process. I believe the Hughes tolling rule can and should be read in such cases to end when the litigation is "fully concluded." The panel's contrary determination, though reasonable and logical, will, in my opinion, be challenging for parties to track in practical operation, provoke further litigation, and ultimately deny parties on both sides of the case of the principal virtue of limitations rules—predictability. I believe a bright-line rule is necessary and, unlike the panel, would conclude the underlying claim is exhausted, or the litigation is otherwise finally concluded, when no party to the litigation is able to seek further, direct appellate relief. Accordingly, and for the reasons discussed below, I respectfully dissent from the Court's decision to deny en banc consideration.
I. Hughes Gives Us a Two-Prong Standard, But Not an Answer
Statutes of limitations afford plaintiffs what the legislature deems an adequate time to present their claims and protect defendants and the courts from cases in which the search for truth may be seriously impaired by the loss of evidence. Murray v. San Jacinto Agency, Inc., 800 S.W.2d 826, 828 (Tex. 1990). In legal malpractice cases, the legislature has settled on a two-year limitations bar. See Tex. Civ. Prac. & Rem. Code Ann. § 16.003(a). The period chosen in this or any other like statute is to some degree, and by necessity, arbitrary. The legislature might just as easily have added or subtracted a day or week from the period with no just cause for complaint from either side. The period is not what is critical here, but rather, its amenability to ready calculation by practitioners of all backgrounds. To be sure, that predictability slips when concerns of fairness require a delay in the start of the period under calculation. As the panel notes, the supreme court in Hughes v. Mahaney & Higgins adopted such a rule for legal malpractice claims arising from the prosecution or defense of a claim that results in litigation. 821 S.W.2d 154, 157 (Tex. 1991). Under that rule, the limitations statute for claims relating to the mishandling of litigation is tolled until all appeals on the underlying claim are "exhausted" or "the litigation is otherwise finally concluded." Apex Towing Co. v. Tolin, 41 S.W.3d 118, 119 (Tex. 2001).
II. When are Appeals Exhausted and Litigation "Finally Concluded"?
Determining when an underlying claim is "exhausted" or when "the litigation is otherwise finally concluded," especially in multi-party cases, is not easy for judges or lawyers, even those regularly plying the appellate trade. There are many variables at play that can affect that determination in the typical case in our appellate courts.
Assume, for example, that a lawyer represents clients A and B on a direct appeal to an intermediate appellate court. He asserts factual insufficiency and a purely legal issue, say, arbitration. In a reply brief and at oral argument, counsel adds an "argument" on the legal issue that was made below but not included in his opening brief—like estoppel to deny arbitration. The appellate court concludes the evidence is factually insufficient and remands the case for a new trial, rejecting counsel's legal arguments as waived, as appellate courts sometimes do. Both clients are unhappy at the prospect of trying a case twice that—they believe—should have been sent to arbitration at the outset. Client B presses forward in seeking review in the Texas Supreme Court. Client A meanwhile, wishing to avoid the cost of the petition or a retrial, hires separate counsel and settles the underlying case.
As to client A, the time for joining in client B's petition for review clearly extends through the petition phase, at least until it is granted. Where the petition is granted and heard, the rules of appellate procedure would appear to be written broadly enough to permit client A to file a petition in response to a motion for rehearing. Tex. R. App. P. 53.7(c). If the appellee files a motion for rehearing, then client A may file a petition within 45 days after the motion is overruled. If the appellee does not file a motion for rehearing, then client A would have to file a petition within 30 days after the last petition was filed, plus an additional 15 days to account for possible extensions under appellate rule 53.7(f). See id. 53.7(f).
As to client A, the time for joining in client B's petition for review clearly extends through the petition phase, at least until it is granted. Where the petition is granted and heard, the rules of appellate procedure would appear to be written broadly enough to permit client A to file a petition in response to a motion for rehearing. TEX. R. APP. P. 53.7(c). If the appellee files a motion for rehearing, then client A may file a petition within 45 days after the motion is overruled. If the appellee does not file a motion for rehearing, then client A would have to file a petition within 30 days after the last petition was filed, plus an additional 15 days to account for possible extensions under appellate rule 53.7(f). See id. 53.7(f).
The supreme court grants client B's petition and hears argument during which the respondent urges the court not to consider counsel's estoppel argument, claiming it was waived at the intermediate court of appeals level. The supreme court concludes that estoppel is an "argument," not an "issue," and, as a result, may be raised at any time, and reverses on that basis. See, e.g., Greene v. Farmers Ins. Exch., 446 S.W.3d 761 (Tex. 2014). It is not difficult to imagine that the supreme court's opinion is issued more than two years after the court of appeals' decision, as many are, thus, raising the potential of one limitation period expiring before the other even starts.
Under our opinion in this case, clients A and B both have claims to pursue and the start of both periods will be tolled, though to different dates. Standing alone, that may not be cause for concern, though both will pursue the same claim, against the same party, and arising out of the same case. But, having multiple, potentially partially overlapping periods for the lawyer and parties to track is not the end of the problem. Calculating the start of the limitations clock for client A (or B, who was forced to a supreme court process he might have avoided) under this scenario (and many others) is not a task for the novice or the faint of heart, even if we imagine the litigation in isolation as to client A.
Under our rules, our mandate will not issue in a case until the supreme court has denied a petition for review in that case, or the time has expired for all parties to seek review. Tex. R. App. P. 18.1. On remand, we are to comply with the supreme court's disposition of the case, and unless it parses its holding as to parties, we are obliged to conform our own mandate to that result. See, e.g., Fletcher v. Blair, 874 S.W.2d 83, 84 n.1 (Tex. App.—Austin 1994, writ denied) (conforming mandate as to non-petitioning unsuccessful appellee on remand). And, even if our mandate had issued earlier, despite the rules, we would still have the power to recall it, though our own case law does not speak to whether conforming our legal conclusion as to one party to the correct answer allows us to do the same for another party to the case. I believe we should be permitted to do so. See, e.g., Estate of Lisle v. Comm'r, 431 F.3d 439 (5th Cir. 2005) (recalling mandate as per hypothetical set out herein).
Recall that the limitations rules we establish will govern malpractice suits arising from representation in state and federal court and will provide the rule of decision in either system. Walker v. Armco Steel Corp. , 446 U.S. 740, 100 S.Ct. 1978, 64 L.Ed.2d 659 (1980). Thus, we should be cognizant of the finality concerns under at least these two sets of rules.
Recall that the limitations rules we establish will govern malpractice suits arising from representation in state and federal court and will provide the rule of decision in either system. Walker v. Armco Steel Corp. , 446 U.S. 740 (1980). Thus, we should be cognizant of the finality concerns under at least these two sets of rules.
III. Appeals are Exhausted When Appellate Remedies No Longer Exist
Of course, it hardly takes a robust imagination to bewilder the parties' ability to preserve their rights. Take this case. Here, we have a party who lost in the Texas Supreme Court and who did not petition for certiorari when another did. When was the claim fully concluded for appellate purposes? The panel picks the date the Texas Supreme Court denied his petition for review, citing Hughes. Of course, in Hughes, the aggrieved client-petitioner sought rehearing from the denial of his petition, and the court settled on the date of its denial, noting rehearing was "the last action of right" the petitioner "could take and did take." Thus, Hughes does not tell us directly whether the continuing availability of review comes into play and does not address whether continuing efforts by one or more of the parties in the United States Supreme Court would affect its finality analysis. Because it found the claim to be timely, as tolled by the pending appeal through at least that last act, the Hughes court had no occasion to reach that question.
In this case, Zive did not seek rehearing from the denial of his petition for review or certiorari. I do not believe that Hughes answers the question of whether the appeal is finally concluded or exhausted when the client retains appellate remedies, particularly where the case moves forward on petition for certiorari to the United States Supreme Court. The panel's answer is, again, plausible, but probes further into uncertain territory and, in all events, is contrary to my understanding that finality, as that term is commonly understood, includes the period during which the judgment is still open to direct review, whether that available avenue for relief is invoked or not. See, e.g., Clay v. United States, 537 U.S. 522, 527, 123 S.Ct. 1072, 155 L.Ed.2d 88 (2003) ; O'Sullivan v. Boerckel, 526 U.S. 838, 845, 119 S.Ct. 1728, 144 L.Ed.2d 1 (1999).
The timing difference between the date a trial court enters a judgment or an appellate court issues an opinion and the last date by which either might still be reviewed, may or may not be critical in a particular case, but it often is so and even in the more routine single party appeal context. For most purposes, we regard a case as final, for appellate purposes, when no further review is procedurally available. For example, when the United States Supreme Court announces decisions affecting the rights of litigants, those decisions are generally applicable to all pending cases, regardless of whether the decision was anticipated by the trial court (or the court of appeals) when they rendered their respective judgments. The question, as here, then becomes whether a case was final for appellate purposes when the Supreme Court's decision was handed down. Linkletter v. Walker, 381 U.S. 618, 623 n.4, 85 S.Ct. 1731, 14 L.Ed.2d 601 (1965). The answer does not turn on the date of the issuing court's judgment, but on whether the party still had "direct appeal options" available. See Ex parte Uribe, No. 10-13-00012-CR, 2013 WL 4767525, at *1 (Tex. App.—Waco Sept. 5, 2013, pet. ref'd) (mem. op., not designated for publication). To my understanding, that would include a petition for review by certiorari to the United States Supreme Court. See Clay, 537 U.S. at 524, 123 S.Ct. 1072.
Texas courts have long recognized the same vitality of cases pending at the time new legislation is enacted, drawing a bright line between cases where the right to prosecute the appeal "was not barred" and those where "the right to have the judgment reviewed in any manner had been lost by lapse of time." First Nat'l Bank v. Preston Nat'l Bank , 85 Tex. 560, 22 S.W. 579 (1893) ; see also In re J.J. , 617 S.W.2d 188 (Tex. 1981).
Texas courts have long recognized the same vitality of cases pending at the time new legislation is enacted, drawing a bright line between cases where the right to prosecute the appeal "was not barred" and those where "the right to have the judgment reviewed in any manner had been lost by lapse of time." First Nat'l Bank v. Preston Nat'l Bank , 22 S.W. 579 (Tex. 1893) ; see also In re J.J. , 617 S.W.2d 188 (Tex. 1981).
The question of whether such a decision would apply retroactively to cases that had become final becomes the controlling question in cases raising collateral attacks, like habeas corpus or bill of review in a civil case, that, by definition, are no longer direct appeals. Because the case law distinguishing between direct and collateral attacks turns on the same concept of finality at issue here and is so well developed, I would look for the answer there. Accordingly, I would treat the appeal as final and exhausted for Hughes purposes as of the date the party's or parties' right to seek direct review expires.
Thus, if Hughes intends for the conclusion or exhaustion of the appeals process to include continuing (but unutilized) available remedies, as I believe it does, its tolling would include the period for seeking rehearing and certiorari.
IV. In Multi-Party Cases, Parsing the Appeal as To Parties and Claims Would Invite as Much Confusion on Appeal as It Does in Trial Courts
The supreme court has gone to great lengths to clarify when a putatively final judgment is in fact "final" in the trial court, settling wisely on the notion that there should be only one of them and that it is the one, however captioned, that actually disposes of all parties and all claims. E.g., Lehmann v. Har-Con Corp. , 39 S.W.3d 191, 200–06 (Tex. 2001).
Regardless of whether we focus on the client's last act (or ruling thereon) as the panel does, or disregard lingering but unutilized appellate remedies of client A, where the case continues as to client B, treating the appeal as "otherwise finally concluded" invites needless complication and potential for confusion. For example, our rule in this case should still account for the possibility that client A was deemed a party in the United States Supreme Court, and was just as likely (or unlikely) to obtain relief by direct appeal as client B even though he is not filing the papers seeking it and neither lawyer was likely aware of it. The United States Supreme Court rules anticipate the same systemic quagmire as our own mandate provisions. They provide:
All parties to the proceeding in the court whose judgment is sought to be reviewed are deemed parties entitled to file documents in this Court, unless the petitioner notifies the Clerk of this Court in writing of the petitioner's belief that one or more of the parties below have no interest in the outcome of the petition. A copy of such notice shall be served as required by Rule 29 on all parties to the proceeding below. A party noted as no longer interested may remain a party by notifying the Clerk promptly, with service on the other parties, of an intention to remain a party.
U.S. Sup. Ct. R. 12(6).
So, to calculate the start date if the case, for purposes of Hughes, continues as to one but not all parties, we (and the lawyers) would need to consult the clerk's office of the United States Supreme Court to see what it does not say. I believe that level of sleuthing ought not be required to calculate a deadline.
Where an appeal involving multiple parties continues, I would find that the claim is not exhausted unless there has either been a clear and irrevocable declaration that the absent party could not benefit from the result of further proceedings and the litigation (i.e., the entire case) has not "otherwise finally concluded," otherwise, not until the proceeding comes to final rest with relief on direct review no longer available as to any of the parties to last judgment. I believe the contrary rule undermines the seeming clarity of the start date specified by Hughes and its progeny. Accordingly, I dissent from denial of en banc consideration.
This rule would be consistent with the concept of finality of judgments in the trial courts in state and federal courts alike. See, e.g., Farm Bur. Cty. Mut. Ins. v. Rogers , 455 S.W.3d 161, 163 (Tex. 2015) ; see also Fed. R. Civ. P. 54(b).
Molberg, Pedersen, Reichek, and Carlyle, JJ., join this dissenting opinion
Reconsideration en banc denied.
OPINION DISSENTING FROM denial of APPELLANT's motion to reconsider EN BANC
DAVID J. SCHENCK JUSTICE
Dissenting
I dissent from this Court's decision to deny Appellant's Motion to Reconsider En Banc because I believe the panel's decision does not afford the parties the clear start that is essential to a fair and predictable application of the limitations bar in cases where some, but not all, of the claims and parties in a case continue through the appellate process. I believe the Hughes tolling rule can and should be read in such cases to end when the litigation is "fully concluded." The panel's contrary determination, though reasonable and logical, will, in my opinion, be challenging for parties to track in practical operation, provoke further litigation, and ultimately deny parties on both sides of the case of the principal virtue of limitations rules—predictability. I believe a bright-line rule is necessary and, unlike the panel, would conclude the underlying claim is exhausted, or the litigation is otherwise finally concluded, when no party to the litigation is able to seek further, direct appellate relief. Accordingly, and for the reasons discussed below, I respectfully dissent from the Court's decision to deny Appellant's request for en banc consideration.
I. Hughes Gives Us a Two-Prong Standard, But Not an Answer
Statutes of limitations afford plaintiffs what the legislature deems an adequate time to present their claims and protect defendants and the courts from cases in which the search for truth may be seriously impaired by the loss of evidence. Murray v. San Jacinto Agency, Inc. , 800 S.W.2d 826, 828 (Tex. 1990). In legal malpractice cases, the legislature has settled on a two-year limitations bar. See TEX. CIV. PRAC. & REM. CODE ANN. § 16.003(a). The period chosen in this or any other like statute is to some degree, and by necessity, arbitrary. The legislature might just as easily have added or subtracted a day or week from the period with no just cause for complaint from either side. The period is not what is critical here, but rather, its amenability to ready calculation by practitioners of all backgrounds. To be sure, that predictability slips when concerns of fairness require a delay in the start of the period under calculation. As the panel notes, the supreme court in Hughes v. Mahaney & Higgins adopted such a rule for legal malpractice claims arising from the prosecution or defense of a claim that results in litigation. 821 S.W.2d 154, 157 (Tex. 1991). Under that rule, the limitations statute for claims relating to the mishandling of litigation is tolled until all appeals on the underlying claim are "exhausted" or "the litigation is otherwise finally concluded." Apex Tolling Co. v. Tolin , 41 S.W.3d 118, 119 (Tex. 2001).
II. When are Appeals Exhausted and Litigation "Finally Concluded"?
Determining when an underlying claim is "exhausted" or when "the litigation is otherwise finally concluded," especially in multi-party cases, is not easy for judges or lawyers, even those regularly plying the appellate trade. There are many variables at play that can affect that determination in the typical case in our appellate courts.
Assume, for example, that a lawyer represents clients A and B on a direct appeal to an intermediate appellate court. He asserts factual insufficiency and a purely legal issue, say, arbitration. In a reply brief and at oral argument, counsel adds an "argument" on the legal issue that was made below but not included in his opening brief—like estoppel to deny arbitration. The appellate court concludes the evidence is factually insufficient and remands the case for a new trial, rejecting counsel's legal arguments as waived, as appellate courts sometimes do. Both clients are unhappy at the prospect of trying a case twice that—they believe—should have been sent to arbitration at the outset. Client B presses forward in seeking review in the Texas Supreme Court.1 Client A meanwhile, wishing to avoid the cost of the petition or a retrial, hires separate counsel and settles the underlying case.
The supreme court grants client B's petition and hears argument during which the respondent urges the court not to consider counsel's estoppel argument, claiming it was waived at the intermediate court of appeals level. The supreme court concludes that estoppel is an "argument," not an "issue," and, as a result, may be raised at any time, and reverses on that basis. See, e.g., Greene v. Farmers Ins. Exch. , 446 S.W.3d 761 (Tex. 2014). It is not difficult to imagine that the supreme court's opinion is issued more than two years after the court of appeals' decision, as many are, thus, raising the potential of one limitation period expiring before the other even starts.
Under our opinion in this case, clients A and B both have claims to pursue and the start of both periods will be tolled, though to different dates. Standing alone, that may not be cause for concern, though both will pursue the same claim, against the same party, and arising out of the same case. But, having multiple, potentially partially overlapping periods for the lawyer and parties to track is not the end of the problem. Calculating the start of the limitations clock for client A (or B, who was forced to a supreme court process he might have avoided) under this scenario (and many others) is not a task for the novice or the faint of heart, even if we imagine the litigation in isolation as to client A.
Under our rules, our mandate will not issue in a case until the supreme court has denied a petition for review in that case, or the time has expired for all parties to seek review. TEX. R. APP. P. 18.1. On remand, we are to comply with the supreme court's disposition of the case, and unless it parses its holding as to parties, we are obliged to conform our own mandate to that result. See, e.g., Fletcher v. Blair , 874 S.W.2d 83, 84 n.1 (Tex. App.—Austin 1994, writ denied) (conforming mandate as to non-petitioning unsuccessful appellee on remand). And, even if our mandate had issued earlier, despite the rules, we would still have the power to recall it, though our own case law does not speak to whether conforming our legal conclusion as to one party to the correct answer allows us to do the same for another party to the case. I believe we should be permitted to do so. See, e.g., Estate of Lisle v. Comm'r , 431 F.3d 439 (5th Cir. 2005) (recalling mandate as per hypothetical set out herein).2
III. Appeals are Exhausted When Appellate Remedies No Longer Exist
Of course, it hardly takes a robust imagination to bewilder the parties' ability to preserve their rights. Take this case. Here, we have a party who lost in the Texas Supreme Court and who did not petition for certiorari when another did. When was the claim fully concluded for appellate purposes? The panel picks the date the Texas Supreme Court denied his petition for review, citing Hughes. Of course, in Hughes , the aggrieved client-petitioner sought rehearing from the denial of his petition, and the court settled on the date of its denial, noting rehearing was "the last action of right" the petitioner "could take and did take." Thus, Hughes does not tell us directly whether the continuing availability of review comes into play and does not address whether continuing efforts by one or more of the parties in the United States Supreme Court would affect its finality analysis. Because it found the claim to be timely, as tolled by the pending appeal through at least that last act, the Hughes court had no occasion to reach that question.
In this case, Zive did not seek rehearing from the denial of his petition for review or certiorari. I do not believe that Hughes answers the question of whether the appeal is finally concluded or exhausted when the client retains appellate remedies, particularly where the case moves forward on petition for certiorari to the United States Supreme Court. The panel's answer is, again, plausible, but probes further into uncertain territory and, in all events, is contrary to my understanding that finality, as that term is commonly understood, includes the period during which the judgment is still open to direct review, whether that available avenue for relief is invoked or not. See, e.g., Clay v. United States , 537 U.S. 522, 527 (2003) ; O'Sullivan v. Boerckel , 526 U.S. 838, 845 (1999). The timing difference between the date a trial court enters a judgment or an appellate court issues an opinion and the last date by which either might still be reviewed, may or may not be critical in a particular case, but it often is so and even in the more routine single party appeal context. For most purposes, we regard a case as final, for appellate purposes, when no further review is procedurally available. For example, when the United States Supreme Court announces decisions affecting the rights of litigants, those decisions are generally applicable to all pending cases, regardless of whether the decision was anticipated by the trial court (or the court of appeals) when they rendered their respective judgments.3 The question, as here, then becomes whether a case was final for appellate purposes when the Supreme Court's decision was handed down. Linkletter v. Walker , 381 U.S. 618, 623 n.4 (1965). The answer does not turn on the date of the issuing court's judgment, but on whether the party still had "direct appeal options" available. See Ex parte Uribe , No. 10-13-00012-CR, 2013 WL 4767525, at *1 (Tex. App.—Waco Sept. 5, 2013, pet. ref'd) (mem. op., not designated for publication). To my understanding, that would include a petition for review by certiorari to the United States Supreme Court. See Clay , 537 U.S. at 524.
The question of whether such a decision would apply retroactively to cases that had become final becomes the controlling question in cases raising collateral attacks, like habeas corpus or bill of review in a civil case, that, by definition, are no longer direct appeals. Because the case law distinguishing between direct and collateral attacks turns on the same concept of finality at issue here and is so well developed, I would look for the answer there. Accordingly, I would treat the appeal as final and exhausted for Hughes purposes as of the date the party's or parties' right to seek direct review expires.
Thus, if Hughes intends for the conclusion or exhaustion of the appeals process to include continuing (but unutilized) available remedies, as I believe it does, its tolling would include the period for seeking rehearing and certiorari.
IV. In Multi-Party Cases, Parsing the Appeal as To Parties and Claims Would Invite as Much Confusion on Appeal as It Does in Trial Courts 4
Regardless of whether we focus on the client's last act (or ruling thereon) as the panel does, or disregard lingering but unutilized appellate remedies of client A, where the case continues as to client B, treating the appeal as "otherwise finally concluded" invites needless complication and potential for confusion. For example, our rule in this case should still account for the possibility that client A was deemed a party in the United States Supreme Court, and was just as likely (or unlikely) to obtain relief by direct appeal as client B even though he is not filing the papers seeking it and neither lawyer was likely aware of it. The United States Supreme Court rules anticipate the same systemic quagmire as our own mandate provisions. They provide:
All parties to the proceeding in the court whose judgment is sought to be reviewed are deemed parties entitled to file documents in this Court, unless the petitioner notifies the Clerk of this Court in writing of the petitioner's belief that one or more of the parties below have no interest in the outcome of the petition. A copy of such notice shall be served as required by Rule 29 on all parties to the proceeding below. A party noted as no longer interested may remain a party by notifying the Clerk promptly, with service on the other parties, of an intention to remain a party.
U.S. SUP. CT. R. 12(6).
So, to calculate the start date if the case, for purposes of Hughes , continues as to one but not all parties, we (and the lawyers) would need to consult the clerk's office of the United States Supreme Court to see what it does not say. I believe that level of sleuthing ought not be required to calculate a deadline.
The respondent makes the argument that Supreme Court rule 12 goes on to say that, while all parties to the judgment below are likewise deemed to be parties there, no party can obtain relief from that court unless they actually file something with the court. That is undoubtedly correct and interesting, but it does not answer the question posed by Hughes and its progeny—namely, of when any case filed in that court comes to an end as to any deemed party. Indeed, approximately ninety-nine percent of cases will end with a denial of the petition and with no one obtaining "relief," meaning in those cases (like this one) the case simply ends when the Supreme Court denies the petition and the time runs to seek rehearing. In the other one percent of cases, the non-listed petitioning party is assigned the nominal role of respondent under the rules and is able to indicate his interest and joinder in the request for relief by simply writing a letter to the clerk if the petition is actually granted and relief appears possible on the merits. See Stephen M. Shapiro, et al., SUPREME COURT PRACTICE, § 6.20 (10th ed. 2013).
In all events, whether a petition is simply denied or not, any petition in the United States Supreme Court could result in a year or more of continued proceedings from the date of the original appellate judgment. While such a proceeding continues, and regardless of any ultimate success on the merits, the case is not "finally concluded." Until the case is concluded, no one—and certainly no lay client or even most lawyers—will be able to readily track and ascertain who has exhausted the prospect for direct relief. Having the clock running and expiring in the interim seems counter to Hughes and Apex and certainly their purpose of protecting the client (and indirectly the lawyer) and shielding the party from the need to file while there is still a chance of direct relief.
Where an appeal involving multiple parties continues, I would find that the claim is not exhausted unless there has either been a clear and irrevocable declaration that the absent party could not benefit from the result of further proceedings and the litigation (i.e., the entire case) has not "otherwise finally concluded," otherwise, not until the proceeding comes to a final rest with relief on direct review no longer available as to any of the parties to the last judgment.5 I believe the contrary rule undermines the seeming clarity of the start date specified by Hughes and its progeny. Accordingly, I dissent from the denial of en banc consideration.
190162DF.P05
Opinion by Justice Schenck
Molberg, Osborne, Pedersen, Reichek, and Carlyle, J.J., join this dissenting opinion