Hernandez v. Abraham, Watkins, Nichols, Sorrels & Friend, 2014 Tex. App. LEXIS 11544

Background

Hernandez, Vasquez, and others sues the Law Firm for legal malpractice and breach of fiduciary duty over BP Explosion settlements.
Law Firm filed a declaratory judgment action in Galveston; cases consolidated with the Law Firm’s action; multiple motions for partial summary judgment.
Settlements: Raul Vasquez $55,000; Javier Jose Vasquez $40,000; Jose Hernandez $40,000; all included releases by spouses.
Appellants later sought discovery of other BP clients’ settlements and injuries; trial court denied; mandamus petitions were denied on related matters.
Trial court granted nine Law Firm motions for partial summary judgment and dismissed remaining claims; final judgment was take-nothing against appellants.
Galveston action involved requests for production of documents related to other clients, including MASTER ISOM DATABASE sheets; issues about privilege and scope.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Jurisdiction to dismiss declaratory judgment	Abor prohibits declaration of tort non-liability; court lacked jurisdiction to hear beyond non-liability.	Court had jurisdiction; relief extended beyond non-liability; not required to dismiss.	Court did not abuse discretion; jurisdiction existed for broader declarations.
Negligent settlement and discovery relevance	Texas recognizes negligent settlement; discovery would reveal relevant damages data.	No negligent-settlement cause of action; discovery requests overly broad and vague.	No error; no evidence of negligent settlement; discovery denial within discretion.
Breach of contract/fiduciary duty regarding common expenses	Law Firm charged non-similarly situated clients’ common expenses; breach of fee agreements and fiduciary duty.	Fee agreements permit deduction of common expenses; Agosto affidavit shows similarity to some extent; no breach.	No breach; fee agreements authorize deductions; Agosto affidavit insufficient to show lack of similarity.
Proceeds in registry and partial summary judgment	Should have prevailed on traditional partial summary judgment to dismiss actions and retain funds.	Court properly granted no-evidence and traditional MSJs; firm entitled to funds in registry once actions resolved.	Court's summary judgments affirmed; Law Firm entitled to proceeds in registry; appellants' challenge moot.

Key Cases Cited

Abor v. Black, 695 S.W.2d 564 (Tex. 1985) (declaratory judgments—jurisdiction for non-liability matters; limited discretion to hear such actions)
Guniganti v. Kalvakuntla, 346 S.W.3d 242 (Tex.App.-Houston [14th Dist.] 2011) (trial court should decline jurisdiction in declaratory actions under certain circumstances)
Spawglass Constr. Corp. v. City of Houston, 974 S.W.2d 876 (Tex.App.-Houston [14th Dist.] 1998) (trial court's discretion in declaratory judgment contexts)
Upchurch v. Albear, 5 S.W.3d 274 (Tex.App.-Amarillo 1999) (abstention from exercising jurisdiction in declaratory actions when appropriate)
In re American Optical Corp., 988 S.W.2d 711 (Tex. 1998) (discovery scope; relevance and prohibitions on fishing expeditions)
In re CSX Corp., 124 S.W.3d 149 (Tex. 2003) (scope and tailoring of discovery; burdens to avoid overbreadth)
May v. Ticor Title Ins., 422 S.W.3d 93 (Tex.App.-Houston [14th Dist.] 2014) (contract interpretation; determining breach when facts are undisputed)
In re Alford Chevrolet-Geo, 997 S.W.2d 173 (Tex. 1999) (contract interpretation and implied terms; applying objective interpretation)
In re Sears, Roebuck & Co., 123 S.W.3d 573 (Tex.App.-Beaumont 2003) (discovery scope and shifting burden; overbroad requests improper)
In re Sears, Roebuck & Co., 146 S.W.3d 328 (Tex.App.-Beaumont 2004) (Beaumont panel addressing overbreadth in discovery)
Evans v. First Nat’l Bank of Bellville, 946 S.W.2d 367 (Tex.App.-Houston [14th Dist.] 1997) (writ denial implications for cross-motions and preserved issues)