Dennis H. TAYLOR and Shepherd, Smith & Bebel, P.C., Appellants, v. Valerie WILSON, Appellee.
No. 14-04-00701-CV.
Court of Appeals of Texas, Houston (14th Dist.).
Oct. 6, 2005.
Rehearing Overruled Nov. 3, 2005.
180 S.W.3d 627
Accordingly, we sustain Valley‘s sole issue on appeal to the extent that Valley asserts the trial court erred in denying its special appearance as to the claims asserted by Thuy and Ha; otherwise, we overrule Valley‘s issue. We reverse the trial court‘s order to the extent it denied Valley‘s special appearance as to all the claims asserted by Thuy and Ha against Valley, and we remand to the trial court with instructions to dismiss these claims for lack of personal jurisdiction. Otherwise, we affirm the trial court‘s order.
V. CONCLUSION
Neither Valley nor Unity waived its special appearance. The evidence before the trial court is legally and factually sufficient to support the trial court‘s implied findings regarding the assertion of personal jurisdiction over Unity. Therefore, the trial court did not err in denying Unity‘s special appearance. Accordingly, we overrule Unity‘s two issues on appeal and affirm the trial court‘s order denying Unity‘s special appearance. We reverse the trial court‘s order to the extent it denied Valley‘s special appearance as to the claims asserted by Thuy and Ha against Valley, and we remand to the trial court with instructions to dismiss these claims for lack of personal jurisdiction. We affirm the remainder of the trial court‘s order.
jurisdiction over it would offend traditional notions of fair play and substantial justice, so we need not address this issue.
Wayne H. Paris, Houston, for appellee.
Panel consists of Justices ANDERSON, FROST, and SEYMORE.
MAJORITY OPINION
JOHN S. ANDERSON, Justice.
This is an interlocutory appeal from the denial of a motion to compel arbitration.1 Appellants, attorney Dennis Taylor and the law firm of Shepherd, Smith, & Bebel, P.C., seek relief from the trial court‘s denial of their motion to compel arbitration of Valerie Wilson‘s claim for legal malpractice. Appellants’ brief asserts two issues: (1) whether a suit for legal malpractice is a claim for “personal injury” under
I. BACKGROUND
In 2002, Valerie Wilson retained appellants as legal counsel to represent her on a claim against an investment firm and its broker. Appellants, on Wilson‘s behalf, filed a claim in arbitration seeking economic damages arising from breach of contract, deceptive trade practices, breach of securities statutes, misrepresentation, and breach of fiduciary duty. Wilson and appellants entered into a Power of Attorney and Contingent Fee Contract (the “agreement“) that contains an agreement to arbitrate disputes.2 After the arbitration
In 2004, Wilson filed suit against appellants alleging legal malpractice, breach of fiduciary duty, and breach of contract, and seeking fee forfeiture. Appellants moved to compel arbitration pursuant to the agreement, and the trial court denied the motion. Appellants now appeal.
II. DISCUSSION
A party seeking to compel arbitration must establish the existence of a valid, enforceable arbitration agreement and show the claims asserted fall within the scope of that agreement. J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex.2003). The trial court‘s determination of the arbitration agreement‘s validity is a legal question subject to de novo review. Id.
It is undisputed that the parties in this matter entered into an agreement to arbitrate their disputes. On appeal, appellants argue the trial court erred by not compelling Wilson to arbitrate her dispute according to the terms of the agreement.
A. “Personal Injury”
The trial court denied appellants’ motion to compel arbitration because it determined Wilson‘s legal malpractice action was a claim for “personal injury” pursuant to
B. Miller v. Brewer, In re Hartigan, and In re Godt
The issue of whether a suit for legal malpractice is a claim for “personal injury” under the Texas Arbitration Act is an issue of first impression in this court.4
The Corpus Christi Court of Appeals was the first to address this issue, and, relying on three cases, it held a legal malpractice suit is a claim for “personal injury” under the Texas Arbitration Act. In re Godt, 28 S.W.3d at 738-39. The Godt court relied upon Willis v. Maverick, which held a cause of action for legal malpractice is in the nature of a tort and is governed by a two-year statute of limitations. 760 S.W.2d 642, 644 (Tex.1988). The other two cases relied upon by the Godt court cite Willis as authority for the proposition that a legal malpractice action is a claim for “personal injury.” See Sample v. Freeman, 873 S.W.2d 470, 476-77 (Tex.App.-Beaumont 1994, writ denied) (holding an award for pre-judgment interest in a legal malpractice case is appropriate because a legal malpractice action is a personal injury claim); Estate of Degley v. Vega, 797 S.W.2d 299, 302-03 (Tex.App.-Corpus Christi 1990, no writ) (classifying a legal malpractice claim as a claim for personal injury for statute of limitations purposes). However, in Willis, the Texas Supreme Court held a legal malpractice claim is in the nature of a tort for purposes of determining the statute of limitations, but it did not hold that legal malpractice is a personal injury action. Willis, 760 S.W.2d at 644. Thus, Willis stands for the proposition that legal malpractice is a tort, but not for the conclusion that a claim of legal malpractice is a claim for personal injury.
Moreover, the plaintiff‘s original injury in Godt was based on personal injuries suffered from medical malpractice. Godt, 28 S.W.3d at 734. In reaching its conclusion, the Godt court “apparently relied upon the fact that ‘the nature of Godt‘s complained-of injury in her malpractice claim is an action for personal injury, rather than an action for economic or contractual losses.‘” Miller, 118 S.W.3d at 898 (quoting Godt, 28 S.W.3d at 739). Here, unlike Godt, Wilson‘s underlying claim was for economic losses rather than for personal injury. We reject the Godt analysis and reach the same conclusion as that of our other sister courts holding a legal malpractice claim is not a claim for personal injury. See Miller, 118 S.W.3d at 897-99; In re Hartigan, 107 S.W.3d at 689-91. Our conclusion is buttressed by the legislative history of the personal injury exception to the application of the Texas Arbitration Act.
C. Legislative History of the Personal Injury Provision in the Texas Arbitration Act
The legislative history regarding the personal injury exception to the Texas Arbitration Act reveals the legislature intended to restrict the scope of the personal injury exception to physical personal injury. A summary of the legislative history of the personal injury provision in the Texas Arbitration Act is as follows:
In 1978, the House Judiciary Committee met between legislative sessions to investigate how arbitration could be better used to relieve an increasingly overburdened court system. The committee issued four recommendations designed to increase use of arbitration, then attempted to implement those recommendations via House Bill 15 (“H.B. 15“) in
In the second meeting of the House Judiciary Committee on H.B. 15, an amendment was offered to exclude personal injury actions from the [Texas Arbitration Act]. The bill was subsequently referred to a special subcommittee which modified the amendment by allowing arbitration of personal injury actions under the statute so long as the parties to a written agreement could prove they were advised on the implications of arbitration by counsel. The amendment was only concerned with physical personal injuries, as it also sought to exclude claims for workers’ compensation. The essence of the language in the amendment was agreed to by the Senate, and subsequently adopted into the final version of the bill. The personal injury clause remained substantially unchanged when the 74th Legislature redesignated the [Texas Arbitration Act] from the Civil Statutes to
Robert J. Kraemer, Attorney-Client Conundrum: The Use of Arbitration Agreements for Legal Malpractice in Texas, 33 ST. MARY‘S L.J. 909, 932-34 (2002) (emphasis added) (footnotes omitted). The legislature clearly did not intend to include a claim for legal malpractice within the personal injury exception.
III. CONCLUSION
We find no room for doubt in the legislature‘s intent to restrict the meaning of the personal injury exception of the Texas Arbitration Act to physical personal injury. Inasmuch as Wilson has not suffered a physical injury, her malpractice claim is not excluded from arbitration.5 Thus, the trial court erred as a matter of law by finding Wilson‘s legal malpractice claim was a claim for personal injury. Because we resolve the first issue in appellants’ favor, we do not address their second issue. Accordingly, we reverse the trial court‘s order denying appellants’ motion to compel arbitration and remand this cause with instructions to the trial court to enter an order compelling arbitration between appellee, Valerie Wilson, and the appellants, Dennis Taylor and the law firm of Shepherd, Smith & Bebel, P.C., and staying all other proceedings in this matter pending the outcome of the arbitration.
J. FROST concurring.
As pled in her petition, Wilson‘s alleged mental anguish damages are the result of economic losses caused by an attorney‘s negligence. When a plaintiff‘s mental anguish is a consequence of economic losses caused by an attorney‘s negligence, the plaintiff may not recover damages for that mental anguish. Douglas v. Delp, 987 S.W.2d 879, 885 (Tex. 1999). Thus, Wilson‘s mental anguish damages are not recoverable, and cannot support her assertion that her claim is one for a physical personal injury.
The court correctly concludes that the legal malpractice claim does not fall within the statutory exemption for personal injury claims under the Texas Arbitration Act. However, the majority‘s analysis, which ostensibly relies in part on legislative history, misses the mark. The legislative history for the Texas Arbitration Act is silent with respect to whether “personal injury” includes legal malpractice, but even if it were not, there is no reason to look to legislative history because, under the unambiguous meaning of the statute, a legal malpractice claim is not a claim for personal injury.
The Texas Arbitration Act is contained in
(a) This chapter does not apply to:
...
(3) a claim for personal injury, except as provided by Subsection (c);
...
(c) A claim described by Subsection (a)(3) is subject to this chapter if:
(1) each party to the claim, on the advice of counsel, agrees in writing to arbitrate; and
(2) the agreement is signed by each party and each party‘s attorney.
As noted in the majority opinion, Texas courts are divided on this issue. Compare Miller v. Brewer, 118 S.W.3d 896, 899 (Tex.App.-Amarillo 2003, no pet.) (holding a legal malpractice suit stemming from employment discrimination is not a claim for personal injury), and In re Hartigan, 107 S.W.3d 684, 690-91 (Tex.App.-San Antonio 2003, pet. denied) (holding a legal malpractice claim is not a claim for personal injury), with In re Godt, 28 S.W.3d 732, 738-39 (Tex.App.-Corpus Christi 2000, no pet.) (holding a legal malpractice claim is a personal injury action for all purposes).
The term “personal injury” has been used in both a narrow sense of “bodily injury” and a broader sense, meaning a personal wrong, including libel, slander, malicious prosecution, assault, and false imprisonment, as well as bodily injury. See Gray v. Wallace, 319 S.W.2d 582, 583-84 (Mo.1958); Soukop v. Employers’ Liability Assur. Corp., 341 Mo. 614, 108 S.W.2d 86, 90 (1937). (“The words ‘personal injuries’ as defined by lexicographers, jurists, and text-writers and by common acceptance, denote an injury either to the physical body of a person or to the reputation of a person, or to both.“); BLACK‘S LAW DICTIONARY 707 (5th ed.1979) (defining “personal injury” as follows: “In a narrow sense, a hurt or damage done to a man‘s person, such as a cut or a bruise, a broken limb, or the like, as distinguished from an injury to his property or his reputation ... the term is also used (chiefly in statutes) in a much wider sense, and as including any injury which is an invasion of personal rights, and in this signification it may include such injuries to the person as libel or slander, criminal conversation, malicious prosecution, false imprisonment, and mental suffering.“). Regardless of whether torts that do not cause bodily injury, such as libel, slander, and malicious prosecution, constitute “a claim for personal injury” under
Other states considering the issue in the context of which statute of limitations to apply to legal malpractice claims, have found legal malpractice is not a personal injury claim. For example, the New Jersey Supreme Court reasoned that “the gravamen of legal-malpractice actions is injury to the rights of another, not personal injury.” McGrogan v. Till, 167 N.J. 414, 771 A.2d 1187, 1192 (2001); see also Neel v. Magana, Olney, Levy, Cathcart & Gelfand, 6 Cal.3d 176, 98 Cal.Rptr. 837, 840, 491 P.2d 421(1971) (noting that legal malpractice causes damage to “intangible property interests“); Higa v. Mirikitani, 55 Haw. 167, 517 P.2d 1, 4 (1973) (commenting that “virtually all claims for legal malpractice [concern] a non-physical injury to an intangible interest of the plaintiff“); Acharya v. Carroll, 152 Wis.2d 330, 448 N.W.2d 275, 279 (Ct.App.1989) (“With few exceptions, ... the courts have concluded that legal malpractice does not cause personal injuries and, therefore, is not governed by a personal injury tort statute of limitations.’ “) (quoting 2 Ronald E. Mallen & Jeffrey M. Smith, Legal Malpractice 18.6 at 75-76 (3d ed.1989)). The McGrogan court relied on the analysis from an earlier case in which the court reasoned that “a legal-malpractice action was not ‘a personal injury claim but rather an assertion that an attorney engaged for a particular purpose was negligent in the handling of it, resulting in pecuniary loss to appellant.‘” McGrogan, 771 A.2d at 1193. Likewise, a Tennessee court found that legal malpractice is a claim in which “the injury is not to the person but the negligent failure of the attorney to perform” his or her professional obligation. Hillhouse v. McDowell, 219 Tenn. 362, 410 S.W.2d 162, 166 (1966).
The Supreme Court of Illinois reasoned that the “basis of the legal malpractice claim is that the plaintiff would have been compensated for an injury caused by a third party, absent negligence on the part of the plaintiff‘s attorney.” Eastman v. Messner, 188 Ill.2d 404, 242 Ill.Dec. 623, 721 N.E.2d 1154, 1158 (1999). Thus, the court came to the conclusion that the “injuries resulting from legal malpractice are not personal injuries but, instead, are pecuniary injuries to intangible property interests.” Id. Likewise, the Supreme Court of Pennsylvania, in determining whether a legal malpractice claim was for damages for personal injury, concluded that “a claim for damages based upon legal malpractice does not involve personal injury in that it arises out of negligence and breach of contract, and the injury alleged concerns purely pecuniary interests.” Hedlund Mfg. Co. v. Weiser, Stapler & Spivak, 517 Pa. 522, 539 A.2d 357, 359 (1988). Pennsylvania‘s high court reasoned that the rights involved are more akin to property rights. See id.
In sum, though the nature of a legal-malpractice claim may vary, it is fundamentally a claim for damage to the claimant‘s intangible interest, not to a personal right seeking redress for injury to one‘s body, mind, or emotions. Applying a plain-meaning analysis, a legal malpractice claim is not a claim for personal injury.
The majority emphasizes the legislative history of the statute, which the majority claims evinces a legislative intent to restrict the scope of “personal injury” to “physical injury.” This is not an accurate characterization of the legislative history. As stated in the law review comment on which the majority relies, an amendment was added to the 1979 legislation in ques-
Since at least the early part of the last century, Texas courts have recognized claims such as libel, slander, and false imprisonment—none of which involve physical injury—as personal injury claims. Over a century ago, in Houston Printing Co. v. Dement, the court, holding that libel and slander are included in the term “personal injuries,” explained:
That injuries to the physical man are generally meant by the expression “personal injuries” may be conceded, but it is nevertheless true that injuries to the reputation and to the health have ever been classed and treated by law writers as personal injuries. The absolute rights of each individual are the rights of personal security and injuries against the life, the limb, the body, the health, or the reputation of the individual.
44 S.W. 558, 560 (Tex. Civ.App. 1898, writ denied); accord Brewster v. Baker, 139 S.W.2d 643, 645 (Tex.Civ.App.-Beaumont 1940, no writ) (stating that “[d]amage to character as the result of slander or libel is a personal injury“). Thus, the majority‘s analysis seems to overlook how Texas courts have interpreted the term “personal injury claim.”
Appellants assert—and the majority seems to agree—that because various Texas statutes define “personal injury” in a way that suggests the term is limited to physical injuries,1 we should apply that same meaning in determining if legal malpractice claims fall within the scope of
In sum, the court is correct to the extent it concludes that legal malpractice is not included in “personal injury” as that term is used in
HELMERICH & PAYNE INTERNATIONAL DRILLING CO., Appellant, v. SWIFT ENERGY COMPANY, Appellee.
No. 14-04-00541-CV.
Court of Appeals of Texas, Houston (14th Dist.).
Oct. 11, 2005.
Rehearing Overruled Dec. 1, 2005.