the Vacek Group, Inc., F/K/A Vacek-Crawford, Inc. v. Douglas C. Clark and Benckenstein, Norvell & Nathan, L.L.P.

Opinion issued November 14, 2002

In The

Court of Appeals

For The

First District of Texas

____________

NO. 01-00-00890-CV

____________

THE VACEK GROUP, INC. F/K/A VACEK-CRAWFORD, INC., Appellant

V.

DOUGLAS C. CLARK AND BENCKENSTEIN, NORVELL & NATHAN,

L.L.P., Appellees

On Appeal from the 281st District Court

Harris County, Texas

Trial Court Cause No. 99-38376

O P I N I O N

In this appeal of a legal-malpractice suit, we revisit--in light of the supreme

court's opinion in Murphy v. Campbell --whether the Hughes tolling rule applies to

malpractice claims arising out of transactional work performed by attorneys that

occurs before litigation commences. Murphy , 964 S.W.2d 265, 272 (Tex. 1997);

Hughes v. Mahaney & Higgins , 821 S.W.2d 154, 157 (Tex. 1991). We conclude that

Murphy dictates that the Hughes tolling rule does not apply in such situations.

Appellant The Vacek Group, Inc. f/k/a Vacek-Crawford, Inc. sued appellees

Douglas C. Clark (Vacek's former lawyer) and Benckenstein, Norvell & Nathan,

L.L.P. (Vacek's former law firm). After a bench trial, the district court rendered a

take-nothing judgment. Vacek brings six issues on appeal, primarily challenging the

sufficiency of the evidence. We affirm.

Facts

Vacek is a forensic engineering company. The original shareholders were Sam

Vacek, Donna Vacek, and Jim Crawford. After an altercation between Donna Vacek

and Crawford, the shareholders agreed to a "corporate divorce" in which Crawford

would resign as a director and sell his shares to Sam and Donna. Vacek hired Clark

and his law firm to carry out this corporate divorce.

Clark drafted an April 15, 1997 agreement in principle, which was described

in the document as a "preliminary agreement." According to the Agreement,

Crawford was to transfer his shares of Vacek to Sam and Donna in exchange for

Vacek's funding Crawford's simplified employee pension plan. Clark did not include

language in the Agreement that released any potential claims by Crawford against

Vacek. The Agreement was signed by Sam, Donna, and Crawford.

After disputes arose over compliance with the Agreement, Vacek sent Clark

the following July 25, 1997 letter:

Based on recent events and the demand letter sent by the attorney for

Jim Crawford yesterday it is obvious we are headed for court. We have

now hired litigation counsel to respond to this letter and make similar

demands on our behalf. You have not done this as our supposed

corporate counsel.

Since it appears that the April agreement you wrote for both sides is at

the center of this dispute, you should not have any more involvement in

this issue.

Therefore, you are instructed not to release any information or have any

discussions regarding any business of our corporation to anyone. This

includes Jim Crawford and counsel for Jim Crawford.

Should you wish to discuss this matter further you may contact our

attorney . . . .

Crawford later filed suit against Vacek, which Vacek settled for $24,000.

On July 27, 1999, Vacek sued Clark and his law firm for negligence, breach of

fiduciary duty, breach of contract, and violation of the Deceptive Trade Practices-Consumer Protection Act. See Tex. Bus. & Com. Code Ann. §§ 17.41 -.63 (Vernon

1987 & Supp. 2002). Clark and the law firm answered and pleaded the affirmative

defense of limitations. See Tex. R. Civ. P. 94. After a bench trial, the district court

rendered a take-nothing judgment and filed findings of fact and conclusions of law.

In addition to holding against Vacek on the merits, the district court found that

Vacek's claims against Clark and his law firm accrued before July 27, 1997 and

concluded that those claims were barred by the statute of limitations. See generally

Tex. Civ. Prac. & Rem. Code Ann. § 16.003 (Vernon Supp. 2002) (two-year

limitations period); Willis v. Maverick , 760 S.W.2d 642, 644 (Tex. 1988).

Discussion

In issue one, Vacek challenges the factual sufficiency of the district court's

discovery-rule finding that Vacek's malpractice claims against Clark and his law firm

accrued before July 27, 1997. We review a trial court's findings of fact for factual

sufficiency under the same standard as a jury verdict. Anderson v. City of Seven

Points , 806 S.W.2d 791, 794 (Tex. 1991). Because Clark and his law firm had the

burden at trial to prove limitations, we will set aside the findings if the supporting

evidence is so weak as to be clearly wrong and manifestly unjust. See Cain v. Bain ,

709 S.W.2d 175, 176 (Tex. 1986).

Vacek argues that the statute of limitations does not apply for two reasons. (1)

Tolling of limitations due to failure to disclose material fact

First, Vacek claims the statute of limitations was tolled because Clark

performed work for Vacek after July 27, 1997, billed for that work, and failed to

disclose a material fact--that execution of the Agreement would not protect Vacek

from subsequent claims because the Agreement did not include a release. McClung

v. Johnson , 620 S.W.2d 644, 647 (Tex. Civ. App.--Dallas 1981, writ ref'd n.r.e.)

(holding limitations tolled until termination of attorney-client relationship when

attorney fails to disclose material fact), disapproved on other grounds by Willis v.

Maverick , 760 S.W.2d 642 , 645 n.2 (Tex. 1988). Vacek argues that Clark's post-July

27, 1997 work included the preparation of a July 28, 1997 letter in which Clark

identified himself as "the corporate attorney" and an August 22, 1997 letter regarding

moving Crawford's furniture from Vacek's office and Vacek funding Crawford's

pension plan.

Even if we were to assume Clark and his law firm had a duty to include a

release in a "preliminary agreement," Vacek would still have had the burden of proof

at trial regarding Clark's and his law firm's alleged failure to disclose. On appeal,

Vacek does nothing more than make the conclusory statement that "Clark breached

his duty to disclose facts material to his representation of the Corporation (that

execution of the Agreement would not protect the Corporation from subsequent

claims)." Without further argument or any citation to the record, Vacek has presented

nothing for this Court to review. See Harris County Mun. Util. Dist. No. 48 v.

Mitchell , 915 S.W.2d 859, 866 (Tex. App.--Houston [1st Dist.] 1995, writ denied);

see also Tex. R. App. P. 38.1(h) (appellate brief must contain clear and concise

argument for contentions made, with appropriate citations to authorities and record).

Hughes tolling rule

Second, Vacek claims the statute of limitations was tolled because of the

Hughes tolling rule. See Hughes , 821 S.W.2d at 157 . In Hughes , the Texas Supreme

Court observed that "when an attorney commits malpractice while providing legal

services in the prosecution or defense of a claim which results in litigation, the legal

injury and discovery rules can force the client into adopting inherently inconsistent

litigation postures in the underlying case and in the malpractice case." Hughes , 821

S.W.2d at 156 . The court held that such a position was untenable. Id . As a remedy,

the court announced the Hughes tolling rule, stating that the statute of limitations for

a malpractice claim against an attorney, committed in the prosecution or defense of

a claim that results in litigation, is tolled until all appeals on the underlying claim are

exhausted. Id. at 157 . (2)

The supreme court has restated the Hughes tolling rule on numerous occasions,

each time stating that the rule is invoked when the alleged malpractice is committed

by an attorney during the prosecution or defense of a claim that results in litigation.

Underkofler v. Vanasek , 53 S.W.3d 343, 347 (Tex. 2001); Apex Towing Co. v. Tolin ,

41 S.W.3d 118, 121 (Tex. 2001); Murphy , 964 S.W.2d at 272 ; Sanchez v. Hastings ,

898 S.W.2d 287, 288 (Tex. 1995); Am. Centennial Ins. Co. v. Canal Ins. Co. , 843

S.W.2d 480, 483-84 (Tex. 1992); Gulf Coast Inv. Corp. v. Brown , 821 S.W.2d 159,

160 (Tex. 1991); Aduddell v. Parkhill , 821 S.W.2d 158, 159 (Tex. 1991), overruled

on other grounds by Underkofler , 53 S.W.3d at 347 . However, a 1991 supreme court

decision and a 1995 decision from this Court have raised an issue whether the Hughes

tolling rule applies only to legal-malpractice claims arising from litigation of an

underlying claim, or whether it applies to those legal-malpractice claims arising from

transactional work performed by an attorney as well. See Gulf Coast Inv. Corp. , 821

S.W.2d at 160 (allowing application of Hughes tolling rule to attorney's alleged

malpractice in conducting nonjudicial foreclosure action of real property that resulted

in wrongful foreclosure action); see also Utica Ins. Co. v. Pruitt & Cowden , 902

S.W.2d 143, 147-48 (Tex. App.--Houston [1st Dist.]) (applying Hughes tolling rule

to allow suit against attorney for committing error in drafting loan modification

agreement), remanded for rendition of agreed judgm't and opinion withdrawn from

publication , No. 01-94-00457-CV (Tex. App.--Houston [1st Dist.] Aug. 3, 1995, no

writ) (not designated for publication). (3)

In 1997, the supreme court addressed the issue of whether the Hughes tolling

rule applied to alleged accounting malpractice. Murphy , 964 S.W.2d at 272 . The

court first determined that, even though the discovery rule applied, the cause of action

accrued no later than the date the plaintiffs received a deficiency notice from the

Internal Revenue Service in June 1987. Id. at 270-72 . The plaintiffs filed their

malpractice action in June 1991, more than two years after receiving the deficiency

notice. Id. at 267 . They argued that the Hughes tolling rule applied because they

filed suit in United States Tax Court in September 1987 to protest the IRS ruling, and

the suit was not resolved until November 1989. Id. at 267, 272 . If the Hughes tolling

rule applied, then the malpractice action was timely filed within two years.

The court stated that Hughes does not toll limitations whenever a litigant might

be forced to take inconsistent positions, because such a rule would create too broad

an exception to limitations. Id. at 272 . The court emphasized that it "expressly

limited the rule in Hughes to attorney malpractice in the prosecution or defense of a

claim that results in litigation." Id. at 272 . Although the court could have decided

Murphy on the narrow ground that the Hughes tolling rule does not apply to

accountants, it instead decided the case on the broader ground that the alleged

underlying malpractice must occur "in the prosecution or defense of a claim that

results in litigation." Id. at 272 . (4) It follows from the logic of Murphy that alleged

attorney-malpractice claims based on transactional work will not be tolled under

Hughes.

Some appellate courts have interpreted the Murphy decision as narrowing the

scope of the Hughes tolling rule to apply to only those cases in which the client

continues to be represented by the attorney who allegedly committed malpractice in

the underlying suit. Eiland v. Turpin, Smith, Dyer, Saxe & McDonald , 16 S.W.3d

461, 465-70 (Tex. App.--El Paso 2000), pet. granted, judgm't vacated w.r.m. per

curiam , 46 S.W.3d 872 (Tex. 2001); Apex Towing Co. v. Tolin , 997 S.W.2d 903, 905

(Tex. App.--Beaumont 1999), rev'd , 41 S.W.3d 118 (Tex. 2001); Nuñez v.

Caldarola , 2 S.W.3d 755, 758-59 (Tex. App.--Corpus Christi 1999), pet. granted,

judgm't vacated w.r.m. per curiam , 48 S.W.3d 174 (Tex. 2001). In response to this

misinterpretation of Murphy , the supreme court stated that continued representation

was not a requirement of Hughes . Apex Towing Co. , 41 S.W.3d at 121-22 .

Additionally, in Apex Towing Co. , the supreme court created further ambiguity

as to whether Hughes applies to alleged malpractice claims based on transactional

work. See id. at 122. The court instructed lower courts to desist from re-examining

whether the policy reasons behind Hughes apply in each legal-malpractice case

presented and to "simply apply the Hughes tolling rule to the category of legal-malpractice cases encompassed within its definition." Id. at 122. The court cited our

withdrawn opinion in Utica Insurance Co. as one of four cases in this category, as

well as our opinion in Farah v. Mafrige & Kormanik, P.C. , the Fourth Court's

opinion in Burnap v. Linnartz , and the Fifth Court's opinion in Hoover v. Gregory .

Id. at 122; Farah , 927 S.W.2d 663 (Tex. App.--Houston [1st Dist.] 1996, no writ);

Burnap , 914 S.W.2d 142 (Tex. App.--San Antonio 1995, writ denied); Hoover v.

Gregory , 835 S.W.2d 668 (Tex. App.--Dallas 1992, writ denied).

In Burnap , the underlying claim arose from the drafting of a mutual release and

indemnity agreement. 914 S.W.2d at 146 . The court of appeals held that when the

alleged malpractice is not connected with the prosecution or defense of a claim, the

rationale for the tolling provision of Hughes is inapplicable. Id. at 147. Burnap also

distinguished the supreme court's Gulf Coast opinion, based on the fact that the

underlying claim in Gulf Coast arose from the prosecution of a claim in a nonjudicial

foreclosure sale. Id. at 147 .

In Hoover v. Gregory , the underlying claim was based on faulty tax advice

rendered before litigation commenced. 835 S.W.2d at 670 . Hoover , like Burnap ,

interpreted Hughes narrowly, stating that the Hughes tolling provision only applies

to legal-malpractice cases in which the suit brought against the attorney arises in the

course of litigating the underlying claim. Id. at 675.

The rationale behind our withdrawn opinion in Utica Insurance Co. is

inconsistent with Burnap and Hoover . Compare Utica Ins. Co. , 902 S.W.2d at 147-48 (applying Hughes tolling rule when underlying malpractice claim not committed

during litigation) with Burnap , 914 S.W.2d at 147 and Hoover , 835 S.W.2d at 675

(not applying Hughes tolling rule when underlying alleged malpractice not committed

during litigation). Based on the conflict between the rationale behind our withdrawn

opinion in Utica Insurance Co. and the Burnap and Hoover opinions, it is impossible

to say that the supreme court's citation of Utica in Apex Towing Co. constitutes an

affirmative endorsement of the Utica rationale. We therefore must revisit--in light

of the supreme court's opinion in Murphy --whether the Hughes tolling rule applies

to malpractice claims arising out of transactional work performed by attorneys that

occurs before litigation commences.

Definitions of "Claim," "Prosecution," and "Defense"

The Hughes tolling rule applies in certain situations "when an attorney commits

malpractice while providing legal services in the prosecution or defense of a claim

which results in litigation." Hughes , 821 S.W.2d at 156 (emphasis added). The

definitions of the words used by the supreme court in Hughes suggests that

transactional malpractice is not contemplated by the equitable-tolling doctrine.

A "claim" is defined as "the assertion of an existing right; any right to payment

or to an equitable remedy." Black's Law Dictionary 240 (7th ed. 1999). The

Restatement (Second) of Judgments agrees with this definition, noting that the term

"claim" and its older cognate "cause of action" are references to units of litigation.

Restatement (Second) of Judgments ch. 3, topic 2, tit. D (1982). Further, the

"transactional view of claim," to which the Restatement subscribes, defines the claim

extinguished by rules of bar or merger as including all of the plaintiff's rights "to

remedies against the defendant with respect to all or any part of the transaction, or

series of connected transactions, out of which the action arose." Restatement

(Second) of Judgments § 24(1) & cmt. a (1982).

Based on these definitions, a distinction can be made, in the context of the

Hughes tolling rule, between malpractice claims arising from the litigation of a

client's previously existing claim and a malpractice claim arising from an attorney's

negligence in executing a business transaction. In the first instance, when a

malpractice claim is based on an attorney's error in prosecuting or defending a

client's claim, that claim existed before and independent of the attorney's

involvement. This is the type of "underlying claim" that merits the protection

afforded by Hughes , because "inconsistent litigation postures" must be taken to

resolve both disputes. See Hughes , 821 S.W.2d at 156 . In the second instance, when

a malpractice claim is based on an error in transacting business of some kind, the

client's claim does not exist before or independent of the attorney's involvement.

Rather, the reverse is true. The alleged malpractice itself becomes the "underlying

claim" to the subsequent litigation that it caused.

Independently, an examination of the words "prosecution" and "defense" lead

to the same conclusion. To "prosecute" means to "commence and carry out a legal

action." Blacks Law Dictionary at 1237. "Defense" is defined as "[a] defendant's

method and strategy in opposing the plaintiff or prosecution." Id. at 430. Applying

these definitions, actions taken by attorneys in conducting transactional work do not

qualify as prosecution or defense of a claim.

Categories of Legal Malpractice

It is unclear what the supreme court meant by "that category of legal-malpractice cases encompassed within its [ Hughes '] definition." Apex Towing Co. ,

41 S.W.3d at 122 . Applying the definition of "claim" we have previously discussed,

we see four general categories of legal-malpractice cases: (1) the client has an accrued

claim, and the attorney allegedly commits malpractice either (a) before litigation

commences or (b) in the course of prosecuting or defending the claim in a

nonlitigation setting; (2) the client has an accrued claim, and the attorney allegedly

commits malpractice after litigation commences; (3) the client does not have an

accrued claim, and the attorney allegedly commits malpractice after litigation

commences; and (4) the client does not have an accrued claim, and the attorney

allegedly commits malpractice before litigation commences.

1. The client has an accrued claim and the attorney allegedly commits

malpractice either (a) before litigation commences or (b) in the course

of prosecuting or defending the claim in a nonlitigation setting.

With respect to the first category, the Hughes tolling rule applies to situations

in which the client has an accrued claim and the attorney allegedly commits

malpractice before litigation commences. See Aduddell , 821 S.W.2d at 159 (applying

Hughes to legal-malpractice claim arising from attorney's failure to file lawsuit

before extinguishment of claim by limitations).

This category also includes situations in which the client has an accrued claim

and the attorney allegedly commits malpractice in the course of prosecuting or

defending the claim in a nonlitigation setting. See Gulf Coast Inv. Corp. , 821 S.W.2d

159 . Gulf Coast presumably had an existing contract lien, which it foreclosed at a

nonjudicial sale. Id. at 160 . See generally Tex. Prop. Code Ann. § 51.002 (Vernon

1995) (procedure for sale of property under contract lien). Gulf Coast's attorneys

failed to give proper notice of the nonjudicial foreclosure sale, and as a result, Gulf

Coast was forced to defend itself in a wrongful-foreclosure action. 821 S.W.2d 160 .

Finally, this category includes Hughes itself. 821 S.W.2d at 157. In Hughes ,

the attorney's alleged malpractice occurred in naming himself rather than the

Hugheses as temporary managing conservator of the child in the affidavit of

relinquishment of parental rights. Id. at 155 . This alleged malpractice occurred

before the filing of the adoption proceeding. Id. The supreme court obviously chose

to view the term "claim" in a pragmatic light in Hughes , as technically the adopting

couple had no existing right, i.e. , claim, to adopt.

2. The client has an accrued claim and the attorney allegedly commits

malpractice after litigation commences.

With respect to the second category, there is abundant authority, from both the

supreme court and the courts of appeals, holding that the Hughes tolling rule applies

in such cases. Vanasek , 53 S.W.3d at 345-46 ; Apex Towing Co. , 41 S.W.3d at 119,

123 ; Sanchez , 898 S.W.2d at 288 ; Am. Centennial Ins. Co. , 843 S.W.2d at 483 ;

Edwards , 9 S.W.3d 310, 311, 314 (Tex. App.--Houston [14th Dist.] 1999, pet.

denied); Guillot v. Smith , 998 S.W.2d 630, 631, 633 (Tex. App.--Houston [1st Dist.]

1999, no pet.); Farah , 927 S.W.2d at 669, 679 ; Washington v. Georges , 837 S.W.2d

146, 148 (Tex. App.--San Antonio 1992, writ denied).

3. The client does not have an accrued claim and the attorney allegedly

commits malpractice after litigation commences.

We are unaware of any published opinions that address this category.

4. The client does not have an accrued claim and the attorney allegedly

commits malpractice before litigation commences.

As to the fourth category of cases, the class in which Utica Insurance Co. ,

Burnap , and Hoover fit, the supreme court has not yet definitively spoken. However,

the reasoning of the supreme court in Murphy discredits the rationale of our

withdrawn opinion in Utica Insurance Co. , if Murphy stands for something more than

merely excluding alleged accounting malpractice from the Hughes tolling rule.

Murphy , 964 S.W.2d at 272 . Although the citation in Apex Towing Co. of Utica ,

Burnap , and Hoover certainly has interjected some ambiguity, we believe that the

supreme court will not apply the Hughes tolling rule to a malpractice claim arising

out of transactional work performed by attorneys that occurs before litigation

commences.

Finally, the unresolved conflict between the rationale in Utica Insurance Co.

and the Burnap and Hoover opinions requires us to note the policy concerns raised

in Hughes , notwithstanding the supreme court's direction to simply apply the Hughes

tolling rule. Apex Towing Co. , 41 S.W.3d at 122 .

The rationale behind the Hughes tolling rule suggests that Hughes does not

apply when an attorney allegedly commits malpractice by negligently drafting

documents that are not connected with any existing litigation at the time of their

creation. See Hughes , 821 S.W.2d at 157 . In Hughes , the court noted that if a person

is forced to file a malpractice suit against an attorney while the underlying claim is

still on appeal, that individual will be forced to take inconsistent positions, which will

compromise the likelihood of success in both suits. Id. at 157 . This type of conflict

does not arise when the underlying claim is based on transactional work performed

by an attorney. See Burnap , 914 S.W.2d at 147 .

Accordingly, we conclude that the rationale behind the holding in our

withdrawn Utica Insurance Co. opinion has been discredited by the supreme court's

opinions in Apex Towing Co. and Murphy . We hold the Hughes tolling rule does not

apply to malpractice claims based on errors committed by attorneys in the course of

conducting transactional work. Here, Clark's alleged malpractice was in drafting the

Agreement, which is transactional work. Clark did not draft the Agreement in the

prosecution or defense of a claim that results in litigation. Following Apex Towing

Co. and Murphy , we hold the Hughes tolling rule does not apply to Vacek's situation.

Factual sufficiency of trial court's discovery-rule finding

Having disposed of Vacek's two tolling arguments, we return to its factual-sufficiency challenge to the district court's finding that Vacek's malpractice claims

against Clark and his law firm accrued before July 27, 1997. The district court was

obligated to answer the discovery-rule issue: when did Vacek know, or exercising

reasonable diligence, when should it have known of the facts giving rise to its causes

of action against Clark and his law firm? See HECI Exploration Co. v. Neel , 982

S.W.2d 881, 886 (Tex. 1998). The district court found that date to be before July 27,

1997, relying no doubt on Vacek's July 25, 1997 letter terminating Clark as Vacek's

lawyer. After reviewing the entire record, we hold the evidence supporting the

district court's findings is not so weak as to be clearly wrong and manifestly unjust.

We overrule issue one.

Breach-of-contract claim

In issue two, Vacek argues in part that the district court incorrectly concluded

that Vacek's breach-of-contract claim is subsumed into a negligence claim and is

barred by limitations, citing our opinion in Jampole v. Mathews , 857 S.W.2d 57 (Tex.

App.--Houston [1st Dist.] 1993, writ denied). We do not agree that Jampole applies

to this case.

In Jampole , we recognized a cause of action for breach of contract independent

of a legal-malpractice claim. Id. at 62 . That case, however, limited this distinction

to actions against attorneys for excessive legal fees. Id. ; see Greathouse v.

McConnell , 982 S.W.2d 165 , 172 n.2 (Tex. App.--Houston [1st Dist.] 1998, pet.

denied). Breach-of-contract claims for legal malpractice are in the nature of tort

actions, and the applicable statute of limitations is two years. See Judwin Props., Inc.

v. Griggs & Harrison , 911 S.W.2d 498, 506 (Tex. App.--Houston [1st Dist.] 1995,

no writ).

We overrule that portion of issue two which alleges that the district court

incorrectly concluded that Vacek's breach-of-contract claim is subsumed into a

negligence claim and is barred by limitations.

In the remainder of issue two and in issues three, four, five, and six, Vacek

claims the district court's findings on the merits of the case are factually insufficient:

breach-of-contract claim (remainder of two); DTPA claim (three); negligence claim

(four); breach-of-fiduciary-duty claim (five); and proximate, producing, and legal

cause findings (six) . Because we hold that Vacek's claims are barred by limitations,

we need not reach these issues.

Conclusion

We affirm the district court's judgment.

Sherry J. Radack

Justice

Panel consists of Justices Mirabal, Nuchia, and Radack.

Publish. Tex. R. App. P. 47.4

1. We recognize the novelty of raising statute-of-limitations tolling issues in the

context of a factual-sufficiency discussion, and we do not commend this

practice to the bar.

2. The two-year statute of limitations applies to legal-malpractice causes of

action.

Willis , 760 S.W.2d at 644 ; see Tex. Civ. Prac. & Rem. Code Ann. §

16.003 (a) (Vernon Supp. 2002). The statute provides that an injured client

must bring suit not less than two years after the day the cause of action accrues.

Tex. Civ. Prac. & Rem. Code Ann. § 16.003 (a) (Vernon Supp. 2002). A

cause of action for legal malpractice generally accrues when the client sustains

a legal injury. Hughes , 821 S.W.2d at 156 . In cases in which the discovery

rule applies, the limitations period does not begin running until the client

discovers--or should have discovered through the exercise of reasonable care

and diligence--the facts establishing the elements of the client's cause of

action. Willis , 760 S.W.2d at 646 .

3. Normally we would neither cite nor discuss an opinion designated for

publication that was later withdrawn from publication.

See Tex. R. App. P.

47.7. Unfortunately, the Utica Insurance Co. opinion is printed in the South

Western Reporter and there is no indication in either West's Texas Subsequent

History Table or Shepard's Texas Citations that the opinion has no

precedential value. Finally, the supreme court, in Apex Towing Co. , has cited

Utica as if it were precedential. We, therefore, discuss the Utica opinion in

this appeal in the context of analyzing the supreme court's opinion in Apex .

4. The Eighth and Fourteenth Courts of Appeals have discussed the stare decisis

effect of the judicial dictum in

Murphy . Eiland v. Turpin, Smith, Dyer, Saxe

& McDonald , 16 S.W.3d 461, 469-70 (Tex. App.--El Paso 2000), pet.

granted, judgm't vacated w.r.m. per curiam , 46 S.W.3d 872 (Tex. 2001)

(following Murphy ); Edwards v. Kaye , 9 S.W.3d 310, 314 (Tex.

App.--Houston [14th Dist.] 1999, pet. denied) (not following Murphy ).