Justice WILLETT delivered the opinion of the Court, in which Chief Justice JEFFERSON, Justice GREEN, Justice JOHNSON, Justice GUZMAN, and Justice DEVINE joined.
In this legal-malpractice case, the clients sued their former attorneys, complaining the attorneys had obtained an inadequate settlement. The trial court granted summary judgment for the attorneys, and the court of appeals affirmed. We affirm the court of appeals' judgment.
In March 2005, an explosion occurred at the Texas City refinery of BP Amoco Chemical Company (BP), killing fifteen workers and injuring many others. Approximately 4000 claims were filed against BP, and BP settled them all. A handful of cases proceeded to trial but settled before a verdict.
Jose Elizondo was working for a BP contractor at the plant on the day of the explosion. The blast threw him about twenty feet. He received medical treatment for neck and back injuries. He returned to work a few days later but claimed he continued to suffer from psychological problems. His wife, Guillermina, claimed that she too suffered, from loss of consortium. Jose met with attorney William Wells and signed a power of attorney
Wells sent a demand letter to BP asking for a settlement of $2 million on the Elizondos' claims. The settlement demand was made on behalf of both husband and wife.
Wells and Kevin Krist met with Jose to discuss the settlement offer. They went through a form release prepared by BP. Jose decided to accept the settlement offer and signed the release in February 2006. The release covers Jose and Guillermina, defining the "RELEASORS" as "JOSE ELIZONDO, GUILLERMINA ELIZONDO, and any of their heirs, executors, agents, trustees, assignees, representatives, attorneys, advisors, administrators, successors and assigns." The release had signature lines for Jose and Guillermina, but only Jose signed it. Guillermina testified that she cannot speak or read English. Jose contends that when he met with his counsel, he asked whether Guillermina needed to sign the agreement and was told it was not necessary.
In August 2007, Jose brought this suit against Wells, Kevin Krist, Ronald Krist, and the Krist Law Firm (the Attorneys). Guillermina was later added as a plaintiff, but all the Attorneys deny ever representing Guillermina. The suit claimed that the Attorneys represented both Elizondos and failed to obtain an adequate settlement on their behalf. The petition asserted claims of professional negligence, breaches of fiduciary duty, and fraud, as well as other claims. It contended that Jose was "sold down the river" so that Ronald Krist could represent BP. After Jose accepted BP's settlement offer, Ronald Krist did represent BP, but he contends his representation of Jose had ended months earlier. The Elizondos also claimed that because Guillermina did not sign the release her claim was never settled, and the Attorneys should have pursued her claim before it became time-barred.
The Attorneys filed several motions for summary judgment on grounds of no evidence of damages, impermissible "claim splitting," and no attorney-client relationship with Guillermina, as well as other grounds. In response to the motions regarding damages, the Elizondos submitted the expert affidavit of attorney Arturo Gonzalez.
The trial court granted some of the summary-judgment motions, including the motions regarding damages. The court of appeals affirmed, holding that because the Elizondos had not presented more than a scintilla of competent evidence of damages, the trial court did not err in granting summary judgment on this ground.
The parties disagree on whether the Gonzalez affidavit was sufficient to defeat summary judgment on the issue of malpractice damages.
In his eight-page affidavit, Gonzalez recites his general qualifications and his specific involvement in the BP litigation. He worked for two firms that represented claimants in litigation arising from the plant explosion and was appointed by the 212th district court as plaintiffs' liaison counsel. He attested that these experiences familiarized him with the settlement of many claims. He stated that BP focused on ten criteria in determining the general value of a case for settlement purposes: (1) proximity to ground zero; (2) when injury was reported to a supervisor; (3) corroboration of proximity and reporting of injuries to supervisor or management; (4) age of victim; (5) wage earning capacity and wage loss (present and future); (6) injuries and bio-mechanics of injuries — e.g., nature, extent, and duration; (7) medical treatment received and duration thereof (physical and mental/PTSD); (8) surgical versus non-surgical interventions; (9) single or married/residual consortium claims; and (10) onsite versus offsite claims. The affidavit describes the basic facts regarding Jose's injuries, family situation, and work history. It then states:
The affidavit sets out the information reviewed by Gonzalez and details why, in Gonzalez's opinion, the Attorneys failed to exercise due diligence in their representation of the Elizondos. It then states:
It then concludes that, in light of the risk of punitive damages in the BP explosion cases, "these cases were heavily evaluated and settlements obtained were significantly higher as compared to the average personal injury lawsuit in the [S]tate of Texas."
At the outset, the Attorneys contend that the Gonzalez affidavit is defective because a legal-malpractice suit is a "suit within a suit," and proof of malpractice damages requires proof of what the plaintiff would have recovered by way of a judgment after trial absent his attorney's negligence. For example, the Attorneys argue in their brief that plaintiffs alleging malpractice damages "must prove that the `true value' of their case is a collectible recovery, after a trial, that is greater than the actual result they received," and that "[t]o show the existence of malpractice damages, the Elizondos had to show the true value of their claims was greater than what they received, i.e., that they would have recovered by way of judgment an amount greater than they did from BP." They contend that Gonzalez only analyzed why the settlement was inadequate for various reasons, and he did not discuss what amount the Elizondos would have recovered if the case had proceeded to judgment after a trial. We disagree with this argument.
We have recognized that in a legal-malpractice case damages consist of "the amount of damages recoverable and collectible... if the suit had been properly prosecuted."
These cases recognize that legal-malpractice damages are the difference between the result obtained for the client and the result that would have been obtained with competent counsel. They do not require that damages can only be measured against the result the client would have obtained if the case had been tried to a final judgment.
In this case, it is undisputed that BP, a large, solvent corporation, made the decision to settle every case arising from the plant explosion. Here, where the same defendant settled thousands of cases, and indeed made the business decision to settle all cases and not try any to a verdict, we see no reason why an expert cannot base his opinion of malpractice damages on a comparison of what similarly situated plaintiffs obtained from the same defendant. This data is perhaps the best evidence of the real-world settlement value of the case. Under Evidence Rule 703, experts may base their testimony on facts or data that are "of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject."
"Bare, baseless opinions will not support a judgment even if there is no objection to their admission in evidence,"
Our decision in Burrow v. Arce is instructive. In that case as in today's case, attorneys had settled numerous suits in a mass tort proceeding arising out of a plant explosion. The plaintiffs, former clients of the attorneys, contended that the settlements they received were inadequate for various reasons, including the failure of the attorneys to "fully investigate and assess individual claims."
We held that the affidavits submitted by the attorneys were conclusory and therefore insufficient to entitle the attorneys to summary judgment. We considered three affidavits. The most detailed affidavit, from retained expert-attorney Malinak, set out numerous criteria that were important in evaluating settlements in the case, including the underlying liability facts, the identity of the employer, the elements of damages available to each plaintiff, and the losses to each plaintiff.
The Gonzalez affidavit in today's case is similarly conclusory. Like the Malinak affidavit, the Gonzalez affidavit is from an experienced attorney whose credentials are not the problem. The problem is the lack of a demonstrable and reasoned basis on which to evaluate his opinion that the settlement was inadequate. Like the Malinak affidavit, the Gonzalez affidavit explains in some detail the factors or criteria that should inform a determination of the value of the case. Like the Malinak affidavit, the Gonzalez affidavit confirms that the affiant considered the facts relevant to the case, but it fails to offer specifics on why the value of the case was $2-3 million as opposed to the $50,000 received in settlement. A fatal analytical gap divides the recitation of the facts of the Elizondo case and the declaration of its settlement value.
Gonzalez did not evaluate what the Elizondo case would have yielded by way of a judgment if the case had gone to trial. On the contrary, he based his opinion on what the Attorneys should have obtained in settlement. The affidavit makes clear throughout that Gonzalez's opinion of the value of the case stems from his opinion of the settlement the Attorneys should have obtained. As noted above, none of the approximately 4000 claims arising from the BP plant explosion was tried to a verdict. Gonzalez states in the affidavit that through his experience he gained knowledge of the "settlement ranges or case values" in the BP litigation. He then lists the criteria BP used in "determining the general value of a case for settlement purposes." He states his value of the case based on his "knowledge of general settlement values and ... the criteria and protocol relied upon to establish general settlement values." He states that "[t]he settlement offer made by BP ... was basically for nuisance value" and that, given the extraordinary circumstances of the BP plant explosion, "a reasonably competent plaintiff's lawyer should have continued to
We conclude, therefore, that the affidavit did not raise a genuine issue of material fact sufficient to defeat summary judgment.
The dissent reasons that the affidavit raised a fact issue on whether competent counsel would have obtained a settlement in excess of $50,000, which Gonzalez characterized as nuisance value. We differ because, for the reasons stated, the affidavit was devoid of a demonstrable basis, whether we consider that portion of the affidavit claiming the case had a settlement value of $2-3 million, or that portion declaring the settlement value was "far in excess of the $50,000" actually received. These assertions are equally conclusory, suffer from the same fatal gap in analysis, and, as in Burrow, rely on nothing more than the ipse dixit of the expert. We are simply left to take the expert's word as to the adequacy of the settlement, the same defect we recognized in Burrow.
The court of appeals dissent noted that at various points in the litigation the Lawyers objected to the discovery of information about other settlements, and this dissent thought it "fundamentally unfair for the Lawyers to thwart discovery as to other settlements and at the same time use the lack of that information to strike Gonzalez's affidavit."
The settlement agreements in the BP cases contained a confidentiality provision prohibiting disclosure of the details of the settlements to third parties. The Elizondos' expert, Gonzalez, stated in his affidavit that he was bound by this provision. The Attorneys were also bound by this provision.
Further, we can find no place in the record where the Elizondos contended that their expert needed to review and reveal information about other specific settlements in order to prepare a valid expert opinion. The voluminous record before us indicates several pretrial skirmishes where other settlements came up.
In addition, the Elizondos did not ask the trial court to defer ruling on the summary judgment motions until they could obtain from the Lawyers or third parties evidence of other settlements. The Elizondos should have made such a request if they thought their expert needed this data.
As noted above, the Elizondos filed a motion, mentioned by the court of appeals majority and dissent, seeking a trial court order allowing Gonzalez to reveal information regarding other settlements under a proposed protective order.
In several pleadings in our record the Elizondos requested a continuance or more discovery before the trial court ruled on the summary judgment motions. These requests met with some success, in that the trial court agreed not to set a hearing on the summary judgment motions until two weeks after the depositions of the Lawyers were taken. In a motion for continuance filed in April 2008, the Elizondos contended that they needed settlement-related documents pertaining to other BP clients of the Lawyers. However, this pleading disclaimed any need for information regarding the amounts of other settlements, stating that the Elizondos were content with redaction of settlement amounts if that information raised confidentiality concerns
In sum, none of these discovery skirmishes indicate that the Elizondos took the position in the trial court that (1) discovery of the dollar amount of other settlements in similar cases was needed so their expert could make a valid, non-conclusory determination of the adequacy of the Elizondo settlement or better describe his analysis, and (2) consideration of the summary judgment motions on damages should be continued until such discovery was provided. Accordingly, we do not agree with the court of appeals dissent insofar as it would hold that the Lawyers were not entitled to summary judgment because of their attempts to limit discovery regarding other settlements.
The Elizondos contend that their own deposition testimony raised fact issues as to damages sufficient to defeat summary judgment. Jose testified about his pain and suffering, and Guillermina testified
We agree with the Lawyers that even if the Elizondos presented some evidence of actual damages, this does not mean they raised a material issue of fact as to malpractice damages. The two are not the same here, because the case settled for $50,000. Even if the Elizondos suffered some compensable damages, they suffered as a result of the Attorneys' conduct only if, absent malpractice, they probably would have recovered a settlement for more than $50,000. As explained above, the general measure of damages in a legal-malpractice case is the difference between the amount the plaintiff probably would have recovered in the absence of malpractice, and the amount recovered. While a "suit within a suit" analysis is not required in a case like this one, for the reasons explained, the alternative method available to establish attorney-malpractice damages requires an analysis of settlements made under comparable circumstances. While this alternative method is sometimes available, we conclude that such an analysis requires expert testimony. We have in the past noted that proof of attorney malpractice requires expert testimony, because establishing such negligence requires knowledge beyond that of most laypersons.
The Elizondos also argue that summary judgment was not warranted as to Guillermina because she recovered nothing. They argue that Guillermina did not sign the release and therefore still had an unsettled claim, and that she received nothing in the settlement. The parties disagree on whether the Lawyers ever represented Guillermina. But even if Guillermina is correct that the Lawyers represented her and had a duty to obtain a settlement for her, or at least advise her that her claim should be pursued before limitations ran, we cannot agree that she raised a fact issue on damages in light of the Elizondos' own evidence proffered in response to the summary judgment motions. The Elizondos offered proof that (1) William Wells advised BP that he represented Jose and Guillermina and made a settlement demand on behalf of both husband and wife; (2) BP responded with a settlement offer to settle "all claims of Jose L. Elizondo and his
We affirm the court of appeals' judgment.
Justice BOYD filed a dissenting opinion, in which Justice LEHRMANN joined.
Justice HECHT did not participate in the decision.
Justice BOYD, joined by Justice LEHRMANN, dissenting.
To prove the existence of legal malpractice damages, clients who sue their attorneys must establish that "the result obtained for the client" was less (or lower or worse) than "the result that would have been obtained with competent counsel." See ante at 263. The Court holds that Jose and Guillermina Elizondo failed to submit any evidence that could meet that burden, despite their expert's testimony that, in his opinion, the attorneys' breaches of their duties caused the Elizondos to settle their claims "basically for nuisance value," and "a reasonably competent plaintiff's lawyer ... would have garnered far in excess" of that amount. I believe the Court imposes too strict a standard at this summary judgment stage. Because the expert based his opinion on facts that could support a finding that the Elizondos' claims had substantial merit but were settled as if they had no merit at all, I would hold that the Elizondos created a fact issue on the existence of malpractice damages. I therefore respectfully dissent.
This is an appeal from a summary judgment. We must consider the evidence in the light most favorable to the Elizondos, indulging every reasonable inference and resolving any doubts in their favor. See City of Keller v. Wilson, 168 S.W.3d 802, 824 (Tex.2005); see also Shah v. Moss, 67 S.W.3d 836, 844 (Tex.2001). The trial court found that the Elizondos submitted no evidence that they incurred any damages
The Elizondos relied primarily on the affidavit of their expert witness, Arturo J. Gonzalez. According to his affidavit, Gonzalez is a Texas lawyer who has specialized in personal injury claims for over twenty years. Following a 2005 explosion at BP Amoco Chemical Company's plant in Texas City, Gonzalez assisted in the representation of over 525 plaintiffs who, like the Elizondos, asserted claims for damages against BP. For most of that time, Gonzalez served as the plaintiffs' court-appointed liaison counsel to facilitate discovery and the exchange of information between the parties. He "was intimately involved on a day to day basis with the settlement process" involving these claims, and participated in numerous settlement conferences with BP's representatives and attorneys. He was "directly responsible" for negotiating and settling three cases, and has personal knowledge of the values for which most of the other claims were settled. The defendants may ultimately dispute Gonzalez's assertions and qualifications and, at trial, would be free to disprove them or otherwise undermine his credibility or the reliability of his opinions. But for purposes of summary judgment, as the Court acknowledges, Gonzalez's affidavit establishes that he is "an experienced attorney whose credentials are not the problem."
We have previously held that a client who was the plaintiff in an underlying case can establish the existence of malpractice damages by proving that the amount the client recovered was less than the amount "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. & Research Corp., 299 S.W.3d 106, 112 (Tex. 2009). Because we have focused on the recoverable and collectible amount of a judgment following trial, courts often refer to this method of proving damages as a "suit-within-a-suit." See, e.g., Taylor v. Alonso, Cersonsky & Garcia, P.C., 395 S.W.3d 178,
Today, the Court holds that a client who was a plaintiff "in a mass tort litigation involving thousands of similar claimants and arising out of the same event" can also establish the existence of malpractice damages by proving that the amount the client received in settlement is lower than the amounts of "the settlements obtained in other cases ... arising from the event." Ante at 263. This holding is consistent with the Court's comments in Burrow v. Arce, 997 S.W.2d 229, 236 (Tex.1999) (noting that the expert "might have ... compared these settlements to those of similar claims"), and I agree with it. I also agree with the Court's holding that Gonzalez's affidavit was insufficient under this "comparison-of-settlements" method. Gonzalez "did not undertake to compare the Elizondo settlement with other actual settlements obtained in the BP litigation." Ante at 266. He did not state the values for which any of the other cases settled, and he did not assert that the Elizondos' claims were comparable to, but settled for less than, any of the other cases.
But the Elizondos did not rely on the comparison-of-settlements method. Instead, they challenged the defendants' "faulty premise" that the "only way of proving damages is by showing that someone else with identical injuries and claims received a larger settlement." See ante at 269. I agree with the Elizondos that the suit-within-a-suit and the comparison-of-settlements methods are not the only ways to prove the existence of legal malpractice damages. Just as our decisions "do not require that damages can only be measured against the result the client would have obtained if the case had been tried in court to a final judgment," ante at 263, they also do not require that damages can only be measured against the result the client would have obtained if the case had settled for the amounts for which similar cases settled. Since malpractice damages are "the difference between the result obtained and the case's `true value,'" see ante at 263, I would hold that any method that provides competent evidence that the case's "true value" was greater than the "results obtained" will suffice to raise a fact issue on the existence of malpractice damages. And I would hold that, by submitting sufficient expert opinion evidence that their claims had merit but were settled as if they had none, the Elizondos satisfied that burden.
Gonzalez did not utilize the comparison-of-settlements method because confidentiality agreements prohibited him from disclosing the amounts for which other cases settled. Nor did he utilize the suit-within-a-suit method, presumably because BP settled every one of the 2005 explosion claims prior to the entry of any judgment. Instead, after stating his experience and qualifications, explaining the confidentiality of BP's settlement amounts, listing the
(Emphasis added.) In Gonzalez's opinion, the $50,000 that the Elizondos received to settle their claim was "basically for nuisance value" and not a "fair and reasonable" amount based on the merits of the claim.
Although Gonzalez did not define "nuisance value," its meaning is common knowledge, at least among American litigators and judges: a nuisance value settlement is a settlement of meritless, frivolous, or groundless claims for an amount that is less than the defendant would have to spend to defeat them. See, e.g., Valores Corp. v. McLane Co., 945 S.W.2d 160, 169 (Tex.App.-San Antonio 1997, writ denied) (noting that summary judgment rule was intended to dispose of "groundless actions instituted by plaintiffs seeking to harass defendants into nuisance value settlements") (quoting Roy W. McDonald, Summary Judgment, TEX. L.REV. 286, 286 (1952)); Wolcott v. Trailways Lines, Inc., 774 So.2d 1054, 1055 n. 1 (La.App. 2nd Cir.2000) ("The `nuisance value' of a claim is generally considered to be the cost of defending a claim in which it is doubtful the plaintiff will prevail, but is unwilling to simply dismiss."); Fletcher v. City of Fort Wayne, Ind., 162 F.3d 975, 976 (7th Cir. 1998) ("[a] compromise for less than the cost of defense is a good working definition of a nuisance-value settlement"); R. Kozel & D. Rosenberg, Solving the Nuisance-Value Settlement Problem: Mandatory Summary Judgment, 90 VA. L.REV. 1849, 1851 (2004) (defining a nuisance-value settlement as "a payoff extracted by a threat to litigate a meritless claim or defense that both parties know the court would readily dismiss as `untriable' or otherwise legally untenable on an applicable dispositive motion for merits review").
Gonzalez's opinions, however, are not enough. Absent an adequate factual basis, an expert's bare opinion that a claim had merit or that it was settled for nuisance value would be conclusory and, therefore, incapable of creating a fact issue to avoid summary judgment. Gonzalez cannot just expect us to "take his word" for it, see ante at 264; he must provide facts to support his opinions. See, e.g., Jelinek v. Casas, 328 S.W.3d 526, 536 (Tex.2010) ("We have rejected expert opinions not grounded in a sound evidentiary basis: `[I]f no basis for the opinion is offered, or the basis offered provides no support, the opinion is merely a conclusory statement and cannot be considered probative evidence, regardless of whether there is no objection.'" (citation omitted)); see also Elizondo v. Krist, 338 S.W.3d 17, 25-28 (Tex.App.-Houston [14th Dist.] 2010) (Christopher, J., dissenting) (discussing Gonzalez affidavit). In my view, Gonzalez's affidavit recites numerous facts that, taken in the light most favorable to the Elizondos, constitute evidence that the Elizondos' claims had merit but were settled for nuisance value, as if they did not.
Gonzalez provided an extensive recitation of facts supporting his conclusion that the Elizondos' claims had merit. First, he listed ten "criteria or factors" that BP "focused on" when determining the value of claims arising out of the 2005 explosion:
He then listed the facts of the Elizondos' claims that were relevant to these factors:
Based on these facts and the "criteria and protocol relied upon to establish general settlement values in the BP litigation," Gonzalez opined that the Elizondo case "would have had a general value, by way of settlement or verdict, in the range of between Two Million ... and Three Million ... dollars," and he later summarized his view by opining that the claims were worth "far in excess" of the $50,000 that BP paid. Whether the facts that Gonzalez recited were sufficient to support his $2-3 million valuation is doubtful (at best), but, in my view, they constitute some evidence that the Elizondos' claims had merit.
Next, Gonzalez recited facts to support his view that the claims were settled "basically for nuisance value," as if they had no merit. First, he described in some detail what a "plaintiff's attorney using reasonable due diligence" would have done to establish the claims' merit. Specifically, a reasonably diligent attorney would have:
He then described specifically how the attorneys failed to do these things: they did
These facts, if true, would certainly support the duty and breach elements of the Elizondos' malpractice claims. But in my view, they also support Gonzalez's opinion that the claims were settled for nuisance value, as if they had no merit. If, in fact, the attorney defendants did nothing to develop the claims and establish their merit, a reasonable jury could infer that the amount BP paid reflected the cost of defense and the claims' lack of merit, and that the amount was lower than BP would have paid for a meritorious claim. Again, although this cannot constitute evidence of any particular amount of damages, in my view it does constitute evidence of the existence of damages.
In rejecting Gonzalez's affidavit, the court of appeals relied heavily on our decision in Burrow v. Arce, 997 S.W.2d 229 (Tex.1999), as does this Court. In Burrow, the defendants' expert testified by affidavit that he had considered the relevant factors (including the underlying facts, the identity of the defendant, the elements of damages available, and the losses each plaintiff incurred) and concluded based on these factors that each plaintiff was "reasonably and fairly compensated." Id. at 235. The Court held that this affidavit was conclusory because the expert "[did] not explain why the settlements were fair and reasonable." Id. at 235-36. To do this, the Court explained, he "might have analyzed the Clients' injuries by type, or related settlement amounts to medical reports and expenses, or compared the settlements to those of similar claims, or provided other information showing a relationship between the plaintiffs' circumstances and the amounts received." Id. at 236.
In the present case, the Court concludes that Gonzalez's affidavit is "similarly conclusory" because it "fails to offer specifics on why the value of the case was $2-3 million as opposed to the $50,000 received in settlement." Ante at 265. But to avoid summary judgment, Gonzalez did not have to establish that the case was worth $2-3 million as opposed to $50,000; he only had to establish that the case was worth more than $50,000. By providing specifics on why $50,000 reflects the value of a case that had "basically" no merit, and specifics on why the Elizondos' case had merit, I would hold that he has done that.
Burrow is distinguishable from this case in all material aspects. In Burrow, the defendants sought and obtained a traditional summary judgment — they had the burden to prove the absence of damages as a matter of law. 997 S.W.2d at 234. Here, the Elizondos are defending against a no-evidence summary judgment — they need only raise a question of fact on the existence of damages. More importantly, the expert in Burrow provided no facts to support his opinion that the "fair and reasonable" amounts the plaintiffs received were equal to or greater than their true value. Here, by contrast, Gonzalez provided extensive facts to support his conclusion that the Elizondos' settlement was "basically for nuisance value," meaning it did not reflect any merit at all. Because a reasonable jury can infer that a claim that lacks merit is worth less than a claim that has merit, I would hold that Gonzalez's
In response to the attorney defendants' motions for summary judgment, the Elizondos' expert testified that, in his opinion, their claims had merit but were settled as if they had no merit, and he did so in an affidavit in which he identified numerous facts that support each of these two propositions. Because I would hold that the expert's affidavit constitutes competent evidence from which a reasonable jury could infer the existence of damages, I respectfully dissent.
Id. at 21 n. 2 (majority opinion).