Stanfield v. Neubaum, 494 S.W.3d 90

Background

In 2006 Buck Glove sued Jon and Barbara Neubaum for usury; the Neubaums were represented at trial by Stone & Associates. The trial jury found the Neubaums liable for usury (via agent March) and awarded large damages; the Neubaums recovered a smaller counterclaim award.
The Neubaums’ trial attorneys had asserted, but did not present evidence at trial of, two statutory defenses (usury cure letter and bona fide error), and did not call an expert to interpret bank records offered to show a Ponzi scheme.
The Neubaums preserved an agency/no-evidence challenge; on appeal new counsel obtained reversal of the usury judgment because there was legally insufficient evidence that March acted as the Neubaums’ agent. The Neubaums incurred over $140,000 in appellate fees.
The Neubaums sued their trial attorneys for malpractice, alleging failures to present the cure/bona fide defenses and expert evidence caused the adverse trial judgment and unnecessary appellate costs.
The trial court granted summary judgment for the attorneys; the court of appeals reversed in part, holding the attorneys had not conclusively negated causation and that expert testimony might be required. The Supreme Court granted review focused on whether judicial error can be a superseding cause and whether expert proof of causation was required.

Issues

Issue	Neubaums' Argument	Attorneys' Argument	Held
Whether a judicial error can be a superseding (new and independent) cause that breaks proximate causation in a legal-malpractice claim	Judicial error can never be a superseding cause; the attorneys’ trial omissions made the trial error immaterial and proximately caused the need to appeal	Judicial error can be a superseding cause as a matter of law when the attorney did not cause or could not reasonably foresee the judicial error	Judicially caused error can be a superseding cause; here the trial court’s error was a new and independent cause as a matter of law and broke causation
Whether the attorneys’ alleged negligence proximately caused the Neubaums’ appellate fees	The attorneys’ failures (not presenting cure/bona fide defenses and no expert) would have prevented the adverse judgment and the need to appeal	The attorneys did not cause or contribute to the judicial error; the appellate reversal shows the attorneys’ trial strategy was meritorious and the error was the cause of the loss	The attorneys negated proximate cause; their conduct did not substantially cause the harm because the adverse judgment resulted from an unrelated judicial error
Whether foreseeability of the judicial error is required to find it a superseding cause	Foreseeability not relevant; any attorney error that made appeal necessary suffices	Superseding cause requires the judicial error not be a reasonably foreseeable consequence of the attorney’s negligence	Foreseeability is required: if the judicial error is not reasonably foreseeable from the circumstances and the attorney did not contribute to it, it can be a superseding cause
Whether expert testimony was necessary to negate causation on summary judgment	Expert proof would be needed to show the attorneys’ omissions would not have changed the outcome	Because judicial error is a superseding cause as a matter of law here, no expert testimony was required to negate causation	No expert was required; as a matter of law the unrelated judicial error negated proximate cause and entitled attorneys to summary judgment

Key Cases Cited

Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. Nat’l Dev. & Research Corp., 299 S.W.3d 106 (Tex. 2009) (elements of legal malpractice and proximate-cause principles)
IHS Cedars Treatment Ctr. of DeSoto, Tex., Inc. v. Mason, 143 S.W.3d 794 (Tex. 2004) (creating a condition that merely makes harm possible is insufficient to show substantial-factor causation)
Dew v. Crown Derrick Erectors, Inc., 208 S.W.3d 448 (Tex. 2006) (intervening act that merely exploits an earlier negligence may be a concurring cause rather than superseding)
Columbia Rio Grande Healthcare, L.P. v. Hawley, 284 S.W.3d 851 (Tex. 2009) (foreseeability and factors for distinguishing concurring vs. superseding causes)
Bell v. Campbell, 434 S.W.2d 117 (Tex. 1968) (an intervening act that alters the natural sequence and produces results that would not otherwise occur can be a superseding cause)
Phan Son Van v. Peña, 990 S.W.2d 751 (Tex. 1999) (burden shift on summary judgment when defendant shows a superseding cause)