902 F.3d 516
5th Cir.2018Background
- Reese owned flood-insured property damaged in Hurricane Ike; insurer Fidelity initially authorized some payments but denied additional amounts for lack of proof of loss.
- Reese hired Aftermath Public Adjusters and licensed public adjuster Michael Bacigalupo, who prepared a Proof of Loss and estimates asserting larger damages.
- Fidelity denied the claim in August 2009; Reese sued Fidelity in August 2010; that suit was resolved against her on summary judgment on September 9, 2014.
- Reese sued Aftermath and Bacigalupo on September 8, 2016 for negligence and breach of contract for failing to timely submit proof of loss; defendants moved for summary judgment as time-barred under Texas statutes of limitation.
- Reese (later substituted by her grandson Bloom) argued Texas’s Hughes tolling rule postponed limitations until the underlying litigation concluded; the district court rejected that extension and dismissed the claims as untimely.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Texas’s Hughes tolling rule (which tolls attorney-malpractice statutes of limitations until underlying litigation and appeals conclude) extends to claims against public adjusters | Hughes tolling should apply because public adjusters effectively provided legal services and plaintiffs faced inconsistent litigation postures if forced to sue adjusters before underlying litigation concluded | Hughes is limited to attorney malpractice; public adjusters are non-lawyers and Hughes cannot be expanded beyond attorneys | Court held Hughes applies only to attorney malpractice; tolling does not extend to public adjusters, so claims were time-barred |
Key Cases Cited
- Hughes v. Mahoney & Higgins, 821 S.W.2d 154 (Tex. 1991) (establishes bright-line tolling rule for attorney malpractice until underlying litigation and appeals conclude)
- Murphy v. Campbell, 964 S.W.2d 265 (Tex. 1997) (refuses to extend Hughes beyond attorney malpractice)
- Apex Towing Co. v. Tolin, 41 S.W.3d 118 (Tex. 2001) (describes Hughes as a bright-line rule limited to attorneys)
- Vaught v. Showa Denko K.K., 107 F.3d 1137 (5th Cir. 1997) (diversity cases apply state statutes of limitation and tolling rules)
- In re DePuy Orthopaedics, Inc., 888 F.3d 753 (5th Cir. 2018) (directs federal courts to predict how state supreme court would decide unsettled state-law questions)
- Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732 (Tex. 2001) (explains the discovery rule for accrual when injury is not objectively verifiable)
- Askanase v. Fatjo, 130 F.3d 657 (5th Cir. 1997) (interprets Hughes as tolling only when attorney commits malpractice)