Legal Malpractice has become so complicated that
you need an expert to help figure it out.

TX: No duty to non-clients?

Span Enterprises v. Wood, 274 S.W.3d. 854 (Tex. App. 2008)

TX: Securities law

Student Contributor: David Yanoff

Facts:  Plaintiffs were an investor (Amin) and his corporation (Span). Defendant was an attorney (Wood) who represented a different corporation (Triumph) in which plaintiffs invested. Amin met with Triumph’s CEO (Helms) regarding possible investment in the company. After negotiating with Helms, Amin decided to invest $200,000 in the company and to loan the company another $300,000, which would be repaid in installments over 2-3 years. Triumph sought Wood’s counsel in drafting the agreement. Wood suggested that Triumph issue Amin “Preferred Partnership Units” instead of incurring $300,000 debt from a loan. This meant that the $300,000 would be an investment rather than a loan. Amin understood he would be paid back and end up with a 10 percent interest in Triumph. In August 1999, a “Preliminary Agreement” was signed, stating that its terms were to be incorporated into the partnership documents. In drafting the partnership documents, however, Wood changed the terms of the guaranteed payback, such that Amin would have to request redemption of his units rather than receive automatic payments. The new terms also provided that each payment to Amin would reduce his ownership interest in Triumph. Amin executed the agreement, apparently unaware of these new terms. When Amin sought to substitute Span as limited partner, Helms assured him that the terms were the same as in the Preliminary Agreement. In February 2002, Triumph redeemed some of Span’s units pursuant to the partnership agreement, reducing Span’s interest. Span and Amin filed suit against Wood, alleging breach of fiduciary duty, aiding and abetting Triumph in committing fraud, and aiding and abetting Triumph in breaching fiduciary duties. The trial court granted defendants summary judgment motions, finding that no attorney client relationship existed, and that an attorney cannot be held liable for aiding and abetting a clients breach of fiduciary duties. Plaintiffs appealed.


1) Does an attorney-client relationship exist between the attorney who handles a partnership agreement and all parties to the partnership agreement?

2) Can an attorney be held liable for aiding and abetting a client in breaching his fiduciary duty to a third party?


1) No. Although an attorney-client relationship can, in certain instances, be implied by the conduct of the parties, it is still a contractual relationship that must be knowingly entered into by the parties. Here, Wood had no reason to believe that Amin thought he (Wood) was providing legal services to Amin or Span. Wood’s duty was obviously to Triumph. Furthermore, Amin never “expressly manifested an intent to Wood that Wood provide legal services to Span or Amin . . .”.

2) No, not in Texas. As long as the attorney’s alleged actions that form the basis of the claim occurred in the course of representing a client, the attorney is not liable to a third party for the client’s breach of fiduciary duty.


Attorneys need to be aware of who may be relying on them for legal counsel. While the attorney is generally not liable to those who unreasonably assume a lawyer is providing them with legal advice, an attorney-client relation may be implied/inferred from circumstances.  Attorney’s cannot be held liable for aiding and abetting a client’s breach of fiduciary duty when acting in the capacity of the clients attorney. Because an attorney may serve other roles as well (i.e., financial advisor, broker, business associate), liability may still be possible in some cases. 

Tagged with: , , , , , , ,

Posted in: Texas