In Fitts v. Richards-Smith, three brothers were riding in a car when the car hit another vehicle properly stopped in the road. 2016 Tex. App. LEXIS 1542 (Tex. App.—Texarkana February 17, 2016, no pet. history). The driver was killed and the two other brothers were seriously injured. The family of the killed driver and the two other brothers and their families all hired the same counsel to pursue a claim against the car manufacturer. After counsel was retained, the counsel allegedly did not (1) advise some of the clients that they might have had a claim against the driver’s estate for negligence, (2) disclose a conflict of interest arising from their joint representation of the entire family, and (3) advise them about and preserve the statute of limitations on their viable claims.

Without their attorneys’ knowledge, some of the family made a claim under the driver’s primary liability insurance and settled their claims for around $250,000 (policy limits). They then attempted to collect under an umbrella policy that had around $5 million in coverage, but that carrier denied the claim based on the settlement with the primary insurance carrier and the resulting written release of claims that released the insured. After a settlement with the automobile manufacturer, the family sued their attorneys for breach of fiduciary duty and malpractice, alleging that the attorneys’ malpractice prevented them from recovering under the umbrella policy. The trial court granted summary judgment for the attorneys, and the family appealed.

The court of appeals first addressed whether the family had a breach of fiduciary duty claim. The court held that legal malpractice is not the only cause of action under which a client can recover from his or her attorney. When the facts of a case support claims against a lawyer for something other than professional negligence, the claims may be allowed. However, unless the claim cannot be characterized as advice, judgment, or opinion arising from the attorney-client relationship, the cause of action is for malpractice. The court held that courts do not allow a case arising out of an attorney’s bad legal advice or improper representation to be split out into separate claims for negligence, breach of contract, or fraud, because the real issue remains whether the professional exercised that degree of care, skill, and diligence that professionals of ordinary skill and knowledge commonly possess and exercise.

The court also held that the question is not so easily determined where there is an allegation of failing to disclose a conflict of interest. While “some Texas courts have recognized that breach-of-fiduciary-duty claims alleging the lawyer obtained an improper benefit from his representation or improperly failed to disclose his own conflict of interest are not professional negligence claims[,] . . . other courts have held the claim is a professional negligence claim if the claim is really that the lawyer’s conflict of interest prevented him from adequately representing the client.” Id. In order to determine whether the breach of fiduciary duty claim in a case is really a malpractice claim, one should look to the difference between the two causes of action. “A cause of action for legal malpractice arises from an attorney giving a client bad legal advice or otherwise improperly representing the client.” Id. On the other hand, “[t]he essence of a breach of fiduciary duty involves the ‘integrity and fidelity’ of an attorney.” Id. Its focus “is whether an attorney obtained an improper benefit from representing a client, while the focus of a legal malpractice claim is whether an attorney adequately represented a client.” Id.

“A breach of fiduciary duty occurs when an attorney benefits improperly from the attorney-client relationship by, among other things, subordinating his client’s interests to his own, retaining the client’s funds, using the client’s confidences improperly, taking advantage of the client’s trust, engaging in self-dealing, or making misrepresentations.” Id. “Unlike a claim for breach of fiduciary duty, legal malpractice is based on negligence, because such claims arise from an attorney’s alleged failure to exercise ordinary care.” Id. The court noted that the family’s complaints supporting their breach of fiduciary duty and malpractice claims were the exact same. The court held that the family’s allegations challenge “the degree of care, skill, or diligence in performing [the] duty to inform appellants about issues that could arise during the representation of multiple clients and [the lawyers’] duty to communicate with and among the clients [they] represented” and were solely legal malpractice claims. Id. The court, therefore, affirmed the summary judgment on the family’s breach of fiduciary duty claim.

The court then turned to the malpractice claim and held that a plaintiff asserting a malpractice claim must prove damages. This is important because a breach of fiduciary duty claim does not require damages; a plaintiff can seek profit disgorgement or fee forfeiture. Regarding damages, the court held that the family’s release was effective to bar their claim against the umbrella policy and held that the attorneys  were not at fault for that. The family also did not provide evidence that they could avoid the release due to a defense of mistake. The court affirmed the summary judgment on the malpractice claim due to no damages – specifically noting that there may have been malpractice.

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Photo of David Fowler Johnson David Fowler Johnson

[email protected]
817.420.8223

David maintains an active trial and appellate practice and has consistently worked on financial institution litigation matters throughout his career. David is the primary author of the The Fiduciary Litigator blog, which reports on legal cases and issues impacting the fiduciary…

[email protected]
817.420.8223

David maintains an active trial and appellate practice and has consistently worked on financial institution litigation matters throughout his career. David is the primary author of the The Fiduciary Litigator blog, which reports on legal cases and issues impacting the fiduciary field in Texas. Read More

David’s financial institution experience includes (but is not limited to): breach of contract, foreclosure litigation, lender liability, receivership and injunction remedies upon default, non-recourse and other real estate lending, class action, RICO actions, usury, various tort causes of action, breach of fiduciary duty claims, and preference and other related claims raised by receivers.

David also has experience in estate and trust disputes including will contests, mental competency issues, undue influence, trust modification/clarification, breach of fiduciary duty and related claims, and accountings. David’s recent trial experience includes:

  • Representing a bank in federal class action suit where trust beneficiaries challenged whether the bank was the authorized trustee of over 220 trusts;
  • Representing a bank in state court regarding claims that it mismanaged oil and gas assets;
  • Representing a bank who filed suit in probate court to modify three trusts to remove a charitable beneficiary that had substantially changed operations;
  • Represented an individual executor of an estate against claims raised by a beneficiary for breach of fiduciary duty and an accounting; and
  • Represented an individual trustee against claims raised by a beneficiary for breach of fiduciary duty, mental competence of the settlor, and undue influence.

David is one of twenty attorneys in the state (of the 84,000 licensed) that has the triple Board Certification in Civil Trial Law, Civil Appellate and Personal Injury Trial Law by the Texas Board of Legal Specialization.

Additionally, David is a member of the Civil Trial Law Commission of the Texas Board of Legal Specialization. This commission writes and grades the exam for new applicants for civil trial law certification.

David maintains an active appellate practice, which includes:

  • Appeals from final judgments after pre-trial orders such as summary judgments or after jury trials;
  • Interlocutory appeals dealing with temporary injunctions, arbitration, special appearances, sealing the record, and receiverships;
  • Original proceedings such as seeking and defending against mandamus relief; and
  • Seeking emergency relief staying trial court’s orders pending appeal or mandamus.

For example, David was the lead appellate lawyer in the Texas Supreme Court in In re Weekley Homes, LP, 295 S.W.3d 309 (Tex. 2009). The Court issued a ground-breaking opinion in favor of David’s client regarding the standards that a trial court should follow in ordering the production of computers in discovery.

David previously taught Appellate Advocacy at Texas Wesleyan University School of Law located in Fort Worth. David is licensed and has practiced in the U.S. Supreme Court; the Fifth, Seventh, and Eleventh Federal Circuits; the Federal District Courts for the Northern, Eastern, and Western Districts of Texas; the Texas Supreme Court and various Texas intermediate appellate courts. David also served as an adjunct professor at Baylor University Law School, where he taught products liability and portions of health law. He has authored many legal articles and spoken at numerous legal education courses on both trial and appellate issues. His articles have been cited as authority by the Texas Supreme Court (twice) and the Texas Courts of Appeals located in Waco, Texarkana, Beaumont, Tyler and Houston (Fourteenth District), and a federal district court in Pennsylvania. David’s articles also have been cited by McDonald and Carlson in their Texas Civil Practice treatise, William v. Dorsaneo in the Texas Litigation Guide, and various authors in the Baylor Law ReviewSt. Mary’s Law JournalSouth Texas Law Review and Tennessee Law Review.

Representative Experience

  • Civil Litigation and Appellate Law