634 S.W.3d 214
Tex. App.2021Background
- 135 individuals sued several Texas lawyers and their firms, alleging a paid "barratry" scheme after the Deepwater Horizon spill: lawyers (Williamson, Rusnak, Pohl) used paid marketers and case-runners to solicit thousands of clients and obtain representation agreements (last signed May 2013).
- Plaintiffs asserted claims under the 2011 version of Tex. Gov't Code § 82.0651(a) (civil barratry), plus civil conspiracy, aiding-and-abetting, and later-added breach-of-fiduciary-duty claims (third amended petition).
- Defendants moved for partial summary judgment arguing plaintiffs’ claims were time-barred (two- or four-year statutes), and that the discovery rule, Hughes tolling, and McClung tolling doctrines did not save the claims.
- The trial court granted partial summary judgment dismissing the barratry, conspiracy, and aiding/abetting claims on statute-of-limitations grounds, and later granted summary judgment on the breach-of-fiduciary-duty claims; plaintiffs nonsuited remaining negligence claims.
- On appeal the First Court of Appeals reviewed whether plaintiffs’ claims accrued by May 2013, whether tolling or the discovery rule applied, and whether the fiduciary-duty claims were a permissible recasting to avoid limitations.
- The panel affirmed: plaintiffs’ barratry claims accrued on or before May 2013 and are time-barred; discovery rule, Hughes, and McClung tolling do not apply; derivative claims fail; fiduciary claims were a recast and were dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Accrual / statute of limitations for civil barratry under 2011 §82.0651(a) and applicability of the discovery rule | Barratry claims are subject to a 4-year rule (or at least not time-barred) and the discovery rule delays accrual until plaintiffs learned of wrongdoing | Claims accrued when plaintiffs were solicited (on or before signing contracts, latest May 2013); discovery rule does not apply because plaintiffs knew the solicitations when they occurred | Accrual occurred on or before May 2013; more than four years before suit; discovery rule does not toll §82.0651(a) barratry claims; summary judgment affirmed |
| 2. Applicability of Hughes and McClung tolling doctrines to barratry claims | Hughes or McClung tolling should delay limitations because of attorney involvement and later consequences | Hughes tolling is limited to malpractice in prosecution/defense of a litigated claim; McClung is no longer good law for tolling here | Court refused to extend Hughes beyond malpractice paradigm; McClung tolling not applied; no tolling; summary judgment affirmed |
| 3. Civil conspiracy and aiding-and-abetting (derivative claims) | These derivative claims survive if underlying barratry claims survive; they share the statute of limitations with the underlying tort | Because the underlying barratry claims are time-barred, derivative claims necessarily fail | Conspiracy and aiding-and-abetting are derivative and take the underlying tort's limitations; dismissal affirmed |
| 4. Breach of fiduciary duty (later-pleaded) and remedy/penalties (recast argument) | Plaintiffs contend fiduciary claims accrued later (June 26, 2018) and are not a mere recast; equitable relief and statutory penalties remain available | Fiduciary claims are an attempt to reframe time-barred barratry claims; plaintiffs cannot avoid limitations by artful pleading | Court concluded plaintiffs had recast time-barred barratry claims as fiduciary claims; summary judgment on fiduciary claims affirmed; dismissal stands |
Key Cases Cited
- Nguyen v. Watts, 605 S.W.3d 761 (Tex. App.—Houston [1st Dist.] 2020) (discovery rule does not toll accrual of §82.0651 barratry claims; accrual when solicitation occurs)
- Neese v. Lyon, 479 S.W.3d 368 (Tex. App.—Dallas 2015) (civil barratry private remedy and discussion of limitations for barratry-based claims)
- Hughes v. Mahaney & Higgins, 821 S.W.2d 154 (Tex. 1991) (tolled limitations in narrow malpractice context where malpractice occurs in prosecution/defense of litigated claim)
- Apex Towing Co. v. Tolin, 41 S.W.3d 118 (Tex. 2001) (discussing Hughes tolling and policy justifications for its narrow application)
- Murphy v. Campbell, 964 S.W.2d 265 (Tex. 1997) (definition of "legal injury" and accrual principles)
- Schlumberger Tech. Corp. v. Pasko, 544 S.W.3d 830 (Tex. 2018) (accrual occurs when wrongful act causes injury; full extent of damages need not be known)
- KPMG Peat Marwick v. Harrison Cty. Houston Fin. Corp., 988 S.W.2d 746 (Tex. 1999) (party asserting statute-of-limitations defense must conclusively prove accrual and negate discovery rule)