Brian Erikson and Quilling, Selander, Lownds, Winslett & Moser, P.C. v. Oscar Renda
18-0486
Tex.Dec 20, 2019Background:
- Renda was president and sole shareholder of Renda Marine; after an administrative determination in Nov. 2002 that Marine owed the U.S. $11.86M, Marine’s assets were transferred in 2003 to Renda-related creditors.
- Attorney Erikson advised against bankruptcy and “blessed” the asset-transfer plan in summer 2003, warning only that claims against the government could not be assigned.
- The asset transfers left Marine unable to satisfy the government claim; the government later sued Renda under the federal Priority Statute, alleging personal liability for payments he authorized; Renda was served in Aug. 2009.
- Renda sued Erikson for legal malpractice on June 24, 2014, claiming Erikson failed to warn that the transfers would create his personal liability; Erikson moved for summary judgment asserting limitations and release defenses.
- The court of appeals reversed summary judgment, finding fact issues about whether Hughes tolling applied; the Supreme Court granted review and reversed, holding Hughes tolling did not apply because the alleged malpractice was only incidentally related to prosecuting or defending a claim.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Hughes tolling applies to Renda’s malpractice claim | Hughes tolling tolled limitations until appeals in the Priority Suit were exhausted because malpractice produced that litigation | Hughes tolling applies only when malpractice occurs in the prosecution or defense of a claim; Erikson’s advice was transactional and not part of prosecuting/defending a claim | Hughes tolling does not apply; malpractice was only incidentally related to prosecution/defense of a claim |
| Whether the alleged malpractice occurred "in the prosecution or defense of a claim" | Erikson’s advice related to debt claims and therefore fits Hughes’s scope | Advice merely facilitated asset transfers and did not advance or defend any claim in the underlying litigation | Court requires a direct/integral connection; incidental or transactional advice is insufficient |
| Whether Renda’s malpractice suit was timely under discovery rule plus Hughes | Renda discovered malpractice by service in Aug. 2009 but tolling extended accrual until Priority Suit appeals ended, making 2014 suit timely | Even with discovery rule, accrual was Aug. 2009 and, absent Hughes tolling, the 2014 suit is untimely | Accrual conceded Aug. 2009; without Hughes tolling plaintiff’s suit is barred by the two-year statute |
| Scope of Hughes tolling—categorical vs. policy-driven extension | Tolling should cover malpractice "arising from/related to" prosecution or defense to avoid inconsistent litigation positions | Hughes is a narrow, bright-line, categorical rule limited to malpractice integrally connected to prosecution/defense of a claim | Court enforces Hughes as a strict, categorical rule and refuses to extend it to tenuous or transactional connections |
Key Cases Cited
- Hughes v. Mahaney & Higgins, 821 S.W.2d 154 (Tex. 1991) (adopting tolling rule for attorney malpractice committed in prosecution or defense of a claim that results in litigation)
- Gulf Coast Inv. Corp. v. Brown, 821 S.W.2d 159 (Tex. 1991) (Hughes tolling applies when malpractice in a nonjudicial proceeding results in third-party litigation)
- Apex Towing Co. v. Tolin, 41 S.W.3d 118 (Tex. 2001) (Hughes tolling is categorical; tolling ends when underlying litigation is finally concluded, including by settlement)
- Murphy v. Campbell, 964 S.W.2d 265 (Tex. 1997) (Hughes tolling is limited to attorney malpractice and should not be extended to other professions)
- Willis v. Maverick, 760 S.W.2d 642 (Tex. 1988) (adopting the discovery rule for legal-malpractice claims)