TX: Contract law
Facts: Plaintiff invested in a new restaurant by purchasing shares of a company (ABF) that leased retail space for the restaurant. Plaintiff also personally guaranteed the lease payments. The restaurant developers contracted with a third party (Momentum Group) for construction work to finish the space. Plaintiff met once with Momentum, but did not negotiate or approve a contract with them. Plaintiff was allegedly named on the construction contract without her knowledge or consent. Momentum later stopped work and filed a mechanic’s lien for non-payment. The landlord threatened to cancel the lease because of the lien. One of the other developers contacted an attorney, who suggested that they file a declaratory judgment action to have the mechanic’s lien declared invalid. That attorney referred them to defendant, who filed suit against Momentum on behalf of the developers, including plaintiff. Plaintiff alleged this was also done without her knowledge or consent. Momentum counterclaimed against the developers for amounts due under the construction contract. As a result of the counterclaim, a judgment lien was filed on plaintiff’s real property. Plaintiff learned of the lien when she tried to sell the property. Plaintiff, through another attorney, managed to get the judgment overturned. Plaintiff then sued defendant for professional negligence in commencing a lawsuit in her name without her consent. Plaintiff sought reimbursement for attorneys fees she incurred in getting the judgment against her overturned. Defendant’s counterclaimed for quantum meruit and breach of contract, alleging she was unjustly enriched by defendant’s representation. Plaintiff added claims for breach of fiduciary duty and violation of the Deceptive Trade Practices Act. Defendants moved for summary judgment arguing that plaintiff’s breach of fiduciary duty and DPTA claims were impermissibly fractured professional negligence claims, and that attorney’s fees and loss of use of money were not recoverable in professional negligence claims. The court granted summary judgment to defendant on all claims, and plaintiff appealed, arguing that the facts supporting her breach of fiduciary duty claim were separate and distinct from those supporting the professional negligence claim, and that attorney’s fees were recoverable.
1) Were plaintiff’s DTPA and breach of fiduciary duty claims viable in light of her concurrent claims for professional negligence?
2) Is a plaintiff entitled to attorney’s fees and loss of use of money damages in a professional negligence action?
1) No. Plaintiff did not offer evidence in response to defendant’s motion regarding improper fracturing of claims, so defendant’s motion was properly granted. Professional negligence is exempt from DTPA claims absent unconscionable conduct.
2) Plaintiff may be entitled to attorney’s fees in some cases, so summary judgment was improper. However, loss of use of money is not recoverable beyond what it would have earned at pre-judgment interest rates, so that portion of the summary judgment was proper.
In responding to a summary judgment motion, plaintiff must address each of defendant’s claims so as to establish genuine and material factual issues. Failure to do so will preclude the possibility of a successful appeal.
Posted in: Texas