Morse v. Codilis & Stawiarski, P.C.
4:16-cv-00279
E.D. Tex.Jun 5, 2017Background
- Plaintiff Gregory C. Morse alleges Ditech (and predecessors) wrongfully pursued foreclosure on his property at 223 High Point, Murphy, Texas; Codilis & Stawiarski, P.C. served as Ditech’s foreclosure counsel.
- Morse asserted multiple claims against Codilis grounded in alleged fraud and misconduct during the foreclosure process, including filing fraudulent notices and facilitating an illegal foreclosure sale.
- Codilis filed amended/supplemental Rule 12(b)(6) motions to dismiss, asserting attorney immunity for actions taken as foreclosure counsel.
- The Magistrate Judge recommended dismissal of Morse’s claims against Codilis based on attorney immunity; Morse filed objections challenging the scope of immunity and arguing a fraud exception.
- The District Court conducted a de novo review, considered the objections and responses, and adopted the Magistrate Judge’s report, granting Codilis’s motions and dismissing Morse’s claims with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether attorney immunity applies to counsel performing foreclosure-related functions | Immunity applies only to attorneys "prosecuting a suit" with a client who has legal standing; foreclosure counsel not covered | Attorney immunity covers conduct within scope of legal representation, including non-litigation acts like foreclosures | Immunity applies to attorneys acting within scope of representation in foreclosure proceedings; objection overruled |
| Whether an alleged lack of client standing defeats attorney immunity | Codilis cannot claim immunity if its client (Ditech) lacked standing to foreclose | Immunity analysis depends on the kind of conduct, not the merits or client’s standing | Client’s alleged lack of standing does not defeat attorney immunity; focus is on type of conduct |
| Whether alleged attorney fraud creates an exception to immunity | "No lawyer is immune from liability when fraud is involved" — Codilis’s alleged knowing fraud removes immunity | There is no fraud exception; immunity covers acts that are normal attorney duties even if alleged wrongful | Fraud allegations alone do not overcome attorney immunity where conduct is within scope of representation |
| Whether Plaintiff sufficiently objected to the Magistrate Judge’s findings | Objections assert knowledge of wrongful acts and fraudulent documents | Codilis contends objections fail to meaningfully challenge the Magistrate’s legal analysis | Court found objections insufficient to defeat immunity and adopted Magistrate’s recommendation |
Key Cases Cited
- Cantey Hanger, LLP v. Byrd, 467 S.W.3d 477 (Tex. 2015) (attorney immunity may apply outside litigation; focus on type of conduct)
- Troice v. Proskauer Rose, LLP, 816 F.3d 341 (5th Cir. 2016) (no fraud exception to attorney immunity; immunity depends on nature of conduct)
- Bradt v. West, 892 S.W.2d 56 (Tex. App.—Houston [1st Dist.] 1994) (immunity analysis focuses on conduct type, not merits)
- Likover v. Sunflower Terrace II, Ltd., 696 S.W.2d 468 (Tex. App.—Houston [1st Dist.] 1985) (distinguished where attorney allegedly aided fraudulent business schemes)
- Lewis v. Am. Expl. Co., 4 F. Supp. 2d 673 (S.D. Tex. 1998) (distinguishes cases involving non-litigation fraudulent schemes from attorney acts in litigation/representation)