Opinion By Justice MOSELEY.
In this legal malpractice case, appellants Kurtis and Ingrid Webb alleged their former attorney, appellee Brad Stockford, mishandled their lawsuit against a seller and the seller's real estate agent based on alleged misrepresentations and non-disclosures made in connection with the Webbs' purchase of a house. The trial court granted Stockford's motion for a judgment notwithstanding the jury's verdict (JNOV). The Webbs appeal.
We conclude there is no evidence that the real estate agent made any misrepresentations or failed to disclose information to the Webbs, and there is no evidence that any judgment against the seller in the underlying suit would have been collectible. As a result, there is no evidence that—but for Stockford's negligence—the Webbs would have obtained a collectible judgment in the underlying suit. Therefore, we conclude the trial court properly granted JNOV in Stockford's favor. We affirm the trial court's final judgment.
The Webbs bought a house from its original owner, Faith Werner. Werner's real estate agent in the transaction was Linda Ault. The Webbs moved in during May 2002. Shortly thereafter, the Webbs discovered that water penetration from the roof had caused interior damage, which had been repaired.
Believing that both Werner and Ault misrepresented and failed to disclose information about this and other problems, the Webbs contacted attorney David S. McCreary about filing suit. McCreary investigated their claims and then turned the case over to his associate, Stockford. Stockford also investigated their claims and filed suit on their behalf in June 2003. In that suit, the Webbs alleged Werner and Ault made false or misleading statements, including statements about previous water penetration, or failed to disclose material facts. As against both defendants, the Webbs alleged common-law fraud, statutory fraud in a real estate transaction, and negligent misrepresentation. The Webbs also alleged a DTPA claim against Werner. They requested economic and exemplary damages, rescission, and attorney's fees.
The case was set for trial on Monday, January 24, 2005. However, with the Webbs' agreement, Stockford filed a handwritten motion non-suiting the action without prejudice to refiling it.
Subsequently, the Webbs filed this suit against Stockford for legal malpractice.
At the close of the trial in the malpractice suit, two questions were submitted to the jury. In response to the first question, the jury found that Stockford's negligence caused the occurrence in question. In connection with that question, the jury was instructed: "To establish proximate cause,
Stockford moved for JNOV on multiple grounds. The trial court granted the motion without specifying the grounds on which it relied and signed a take-nothing judgment against the Webbs. This appeal followed.
A legal malpractice claim is a claim for professional negligence. Golden v. McNeal, 78 S.W.3d 488, 492 (Tex.App.-Houston [14th Dist.] 2002, pet. denied). To recover, the plaintiff must show: (1) the attorney owed the plaintiff a duty; (2) the attorney breached that duty; (3) the breach proximately caused the plaintiff's injuries; and (4) damages. Belt v. Oppenheimer, Blend, Harrison & Tate, Inc., 192 S.W.3d 780, 783 (Tex.2006). When the claim is that lawyers improperly represented the plaintiff in another case, the plaintiff must prove and obtain findings as to the amount of damages that would have been recoverable and collectible if the other case had been properly prosecuted. Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. Nat'l Dev. & Res. Corp., 299 S.W.3d 106, 112 (Tex.2009). This aspect of the malpractice plaintiff's burden is commonly referred to as the "suit within a suit" requirement. See Schlager v. Clements, 939 S.W.2d 183, 187 (Tex.App.-Houston [14th Dist.] 1996, writ denied); see also Gomez v. Hagood, No. 05-99-00260-CV, 2000 WL 992287, at *2 (Tex.App.-Dallas July 20, 2000, pet. denied) (not designated for publication) (citing authority for "suit within a suit").
A court may disregard a jury's verdict and render a JNOV if no evidence supports the jury's findings, or if a directed verdict would have been proper. Tiller v. McLure, 121 S.W.3d 709, 713 (Tex.2003) (per curiam); see TEX.R. CIV. P. 301. To determine whether a JNOV is appropriate, we apply the legal sufficiency standard. See City of Keller v. Wilson, 168 S.W.3d 802, 823-25 (Tex.2005); Wal-Mart Stores, Inc. v. Miller, 102 S.W.3d 706, 709 (Tex. 2003) (per curiam). A JNOV is appropriate when: (1) there is a complete absence of a vital fact; (2) rules of law or evidence preclude according weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a scintilla; or (4) the evidence conclusively establishes the opposite of the vital fact. City of Keller, 168 S.W.3d at 810. We view the evidence and inferences in the light most favorable to the jury's findings. See id. at 823. We must credit evidence that supports the judgment if reasonable jurors could, and we must disregard contrary evidence unless reasonable jurors could not. See id. at 827. If the evidence falls within the zone of reasonable disagreement, we may not invade the fact-finding role of the jurors, who alone determine the credibility of the witnesses,
In their second issue, the Webbs argue the trial court erred in granting JNOV because there was more than a scintilla of evidence to support the jury's finding that Stockford's negligence proximately caused them damages.
One of Stockford's arguments in support of his motion for JNOV was that there was no evidence Ault made any misrepresentation or omission in connection with the sale. Thus, he asserted the Webbs failed to prove their suit-within-a-suit requirement as to Ault—i.e., that but for Stockford's negligence, the Webbs would have obtained a judgment against Ault.
Misrepresentation is a falsehood or untruth with the intent and purpose to deceive. Vela v. Marywood, 17 S.W.3d 750, 761 (Tex.App.-Austin 2000), pet. denied, 53 S.W.3d 684 (Tex.2001) (per curiam); see In re FirstMerit Bank, N.A., 52 S.W.3d 749, 758 (Tex.2001) (orig. proceeding) (an element of commonlaw fraud is material misrepresentation); Hagans v. Woodruff, 830 S.W.2d 732, 735-36 (Tex. App.-Houston [14th Dist.] 1992, no writ) (an element of negligent misrepresentation is providing false information for the guidance of others in their business); TEX. BUS. & COM.CODE ANN. § 27.01(a)(1) (West 2009) (statutory fraud in real estate transaction claim may involve a misrepresentation of material fact).
As a general rule, a failure to disclose information does not constitute fraud unless there is a duty to disclose the information. Marshall v. Kusch, 84 S.W.3d 781, 786 (Tex.App.-Dallas 2002, pet. denied). Thus, silence may be equivalent to a false representation only when the particular circumstances impose a duty on the party to speak and he deliberately remains silent. Id. Whether such a duty exists is a question of law. Id.
In support of their second issue, the Webbs argue that there was evidence that Ault made false representations in connection with the sale of the house. Specifically they refer to a document called a seller's disclosure notice, testimony from Stockford, and testimony from Ingrid Webb.
The seller's disclosure notice was not admitted into evidence, although there was testimony that it indicated, among other things, that there had been no water penetration. However, there was also no evidence that anyone other than the seller, i.e., Werner, completed it. Accordingly, any evidence of false representations or material omissions in the seller's disclosure notice is no evidence of misrepresentations by Ault.
Next, we consider the Webbs' argument that the jury "could have relied solely upon the testimony of Stockford" in making its causation determination. They argue that his testimony about the discovery he conducted in the underlying suit and about what he intended to prove in that suit was evidence that Ault made misrepresentations to them during the purchase of their home.
Stockford responds that his counsel objected to use of his testimony as a fact witness to prove the Webbs would have recovered in the underlying case and that
The Webbs point to Stockford's testimony that he "thought they had a pretty good chance of prevailing at trial." The Webbs characterize this testimony as an admission by Stockford that they would have prevailed against Ault had they been able to present their case in court, and that this admission is some evidence of causation in the malpractice suit. We disagree.
To place this testimony in context, Stockford was asked a series of questions about his handling of the underlying lawsuit.
The Webbs also rely on Stockford's testimony about an information sheet—the "Real Estate Disclaimers"
Thus, Stockford's testimony about what Ault knew and failed to disclose relates to Stockford's preparation for trial, the evidence he obtained in discovery, and what he hoped the evidence would prove at trial. The trial court sustained objection to this testimony on grounds that it was "improper to ask Counsel to be a fact witness when all he was doing was bringing forward the claim of his party and trying to assemble the evidence." See TEX.R. EVID. 602 ("A witness may not testify to a matter unless evidence is introduced sufficient to support a finding that the witness has personal knowledge of the matter ...."); see Southtex 66 Pipeline Co., Ltd. v. Spoor, 238 S.W.3d 538, 544-45 (Tex.App.-Houston [14th Dist.] 2007, pet. denied) (affidavit testimony inadmissible because of lack of personal knowledge of facts stated therein, amounting to no evidence).
In light of the record detailed above, Stockford's statement that he thought the Webbs had a pretty good chance of prevailing at trial is without supporting facts and is therefore merely conclusory as to Ault. See Brown v. Brown, 145 S.W.3d 745, 751 (Tex.App.-Dallas 2004, pet. denied). Specifically, it is not evidence that Ault misrepresented or failed to disclose any material fact about the roof or water penetration. Moreover, Stockford's beliefs as to what the evidence would prove do not constitute personal knowledge of the facts in the underlying lawsuit. Stockford's testimony about the underlying suit concerned the allegations in the Webbs' petition—what he expected to prove—and his discovery. In addition, the Webbs do not challenge the trial court's rulings concerning Stockford's testimony. Those rulings leave this testimony without probative value as to the suit-within-a-suit requirement.
Finally, the Webbs rely on Mrs. Webb's testimony that she "felt" that Ault made a false representation to her. But that is a conclusory statement, devoid of any underlying facts supporting the conclusion. See id. The Webbs do not direct us to any specific evidence that Ault made a statement to them about the condition of the house.
We conclude the Webbs failed to produce evidence that Ault made false representations to them or omitted material
In support of his motion for JNOV, Stockford also argued that the Webbs failed to prove that any judgment received in the underlying case would have been collectible. On appeal, the Webbs assert there was evidence as to the collectibility of a judgment in the underlying case. Because of our resolution of the Webbs' second issue with respect to the evidence of Ault's liability in the underlying suit, we consider the Webbs' argument concerning the evidence of collectibility of a judgment only as to Werner.
Generally, the amount of an underlying judgment that would have been collectible is the greater of
Akin, Gump, Strauss, Hauer & Feld, L.L.P., 299 S.W.3d at 114. The plaintiff must prove the final judgment in the underlying case would have been collectible on or after the date it was first signed. See id. at 113-14. Additionally, if the evidence concerning collectibility relates to a date prior to the final judgment in the underlying case, the evidence must also show "a reasonable probability that the defendant's financial condition did not change during the time before a judgment was signed in a manner that would have adversely affected collectibility." Id. at 114.
As evidence of the collectibility of a judgment against Werner, the Webbs rely on the testimony of David McCreary. He testified that before the underlying suit was filed (in 2003), he investigated Werner's solvency and discovered that she had homestead property worth about $500,000, and a non-exempt attachable condominium that may have been in Florida, resulting in "a possibility of solvency." Disregarding the homestead, the only evidence of Werner's financial condition was her past ownership of a Florida condominium.
However, Kurtis Webb testified that, by July 2003, his wife had confirmed that Werner sold a Florida condominium by looking "it up on the Sarasota County web page." (There was no further identification of the source of that information.) There was no testimony relating the amount Werner received from the sale of the condominium or whether she still had the sales proceeds, or relating to existence or fair market value of any other assets subject to legal process in satisfaction of a judgment as of the date the judgment in the underlying lawsuit would have been signed. See id. Nor was there any evidence of an alternative basis for Werner's solvency, i.e., evidence of her "current income, profits, or access to finances" that could have been diverted to satisfy a judgment, or of the amount an insurer or guarantor would have paid on the judgment. See id.
Even if the above evidence was sufficient to prove Werner's financial condition
We conclude the Webbs failed to produce evidence that a judgment against Werner in the underlying suit would have been collectible. See id. at 113-14. As a result, there is no evidence that—but for Stockford's negligence in the underlying suit—the Webbs would have recovered a collectible judgment against Werner. See id.; Belt, 192 S.W.3d at 783. We resolve the remainder of the Webbs' second issue against them.
Our resolution of the Webbs' second issue is dispositive. Because there was no evidence the Webbs would have prevailed on their claims against Ault or that they would have collected on any judgment against Werner, there is no evidence to sustain the jury's finding that Stockford's negligence proximately caused their damages. See Akin, Gump, Strauss, Hauer & Feld, L.L.P., 299 S.W.3d at 112; Schlager, 939 S.W.2d at 187. Therefore, we conclude the trial court did not err in granting Stockford's JNOV on this ground. See Kelly, 832 S.W.2d at 90.
We affirm the trial court's final judgment.
Stockford testified further that he did not "personally know" whether the roof was defective when the Webbs bought the house, but the seller's disclosure notice said the roof was "brand new," which was "not accurate," and that there was no water penetration in the house and "[t]here had been." Later, counsel objected that Stockford was "not a fact witness to the claims made by his parties." The trial court said Stockton "if he knows something is true, he can answer that. If he does not know it's true, he can answer to what his understanding is...." The trial court overruled the objection but gave counsel "a running objection."