Albert Lee Giddens, a Professional Legal Corporation v. Victoria Hale Risinger

Opinion issued March 8, 2012

In The

Court of

Appeals

For The

First District

of Texas

————————————

NO. 01-11-00242-CV

———————————

ALBERT LEE GIDDENS, A

PROFESSIONAL LEGAL CORPORATION, Appellant

V.

VICTORIA HALE RISINGER, Appellee

On Appeal from the 11th District Court

Harris

County, Texas

Trial

Court Cause No. 2010-49110

MEMORANDUM OPINION

We

deny appellant’s motion for rehearing. See Tex.

R. App. P. 49.3. We withdraw our January

26, 2012 opinion, substitute this opinion in its stead, and vacate our January

26, 2012 judgment.

Appellant, Albert Lee Giddens, A

Professional Legal Corporation, challenges the trial court’s rendition of

summary judgment in favor of appellee, Victoria Hale Risinger, in Giddens’s

suit against Risinger for breach of contract.

In three issues, Giddens contends that the trial court erred in granting

Risinger summary judgment, Giddens raised material fact issues on Risinger’s

affirmative defenses, and Risinger did not specifically plead her affirmative

defenses.

We

affirm.

Background

Risinger’s

husband was killed in an automobile collision in 2002. Shortly thereafter, Risinger retained Giddens

to represent her and her two minor children in a wrongful-death lawsuit against

the driver who caused the collision. On

September 8, 2004, the wrongful-death lawsuit was settled for $1,350,000, with

$220,000 of that paid to Giddens for attorney’s fees. At the Minor Settlement Conference, Risinger

testified that she had originally agreed to pay Giddens 40% of any recovery but

Giddens had agreed to reduce his fee to approximately 16.2%, or $220,000.

On

September 8, 2006, Risinger, alleging that Giddens had committed legal

malpractice in the wrongful-death lawsuit, filed a separate lawsuit against

Giddens, individually, his former law firm, Smyrl & Giddens, and his former

law partner. Risinger contended that

Giddens had convinced her that she needed an attorney to represent her in a wrongful-death

lawsuit against the insurance company for the negligent driver, Giddens told

her that if she did not hire her own lawyer “the court would appoint one

anyway,” and Giddens represented other claimants in the wrongful-death lawsuit

who had conflicting interests. Risinger

sought to recover as her damages the attorney’s fees that she had paid to

Giddens in the initial lawsuit. Giddens

did not file any counterclaims. On

February 22, 2010, Risinger submitted an Unopposed Motion to Dismiss with

Prejudice her legal-malpractice lawsuit, which was signed by both her and

Giddens’s attorneys. On March 1, 2010,

the trial court dismissed the legal-malpractice lawsuit with prejudice.

Approximately

five months later, after the parties had entered into the agreed order to

dismiss Risinger’s malpractice lawsuit, Giddens, on August 9, 2010, filed the

underlying breach-of-contract lawsuit against Risinger. Giddens alleged that he and Risinger had

renegotiated the percentage of attorney’s fees that he was to receive from the

wrongful-death lawsuit and Risinger breached this agreement by subsequently

bringing her legal-malpractice lawsuit.

Giddens sought as his damages the “lost profits” from his original

contingent-fee contract, which Giddens characterized as the “difference between

the original agreed upon attorney’s fees and the reduced attorney’s fees.”

Risinger filed an answer generally

denying Giddens’s claim. Risinger then filed

a summary-judgment motion, contending that Giddens’s breach-of-contract claim

failed as a matter of law because Giddens had agreed to accept the reduced

amount of fees as memorialized by a written agreement, Giddens’s claim was

barred by the statute of limitations, and Giddens’s claim was barred by res

judicata. In support of her motion, Risinger

attached to it a copy of the transcript from the Minor Settlement Conference

establishing that Giddens had agreed to the reduced fees. She also attached to her motion her affidavit

in which she testified that her husband was a passenger in a Jeep that was

being driven by his friend at the time of the collision, the Jeep rolled over

when the driver attempted a dangerous maneuver, her husband was killed

instantly, the driver admitted fault within hours of the collision, and the

driver agreed to admit this to his insurance company. She explained that Giddens had contacted her shortly

after the collision, Risinger told Giddens that she intended to negotiate directly

with the driver’s insurer, and she signed a contract with Giddens based upon

him telling her that she “had to hire counsel.”

Risinger further testified that, unbeknownst to her, Giddens also

represented other wrongful-death claimants in regard to the collision. She subsequently filed her legal-malpractice lawsuit

against Giddens, Giddens did not file any counterclaims, and she agreed to

settle the legal-malpractice lawsuit.

Risinger also attached to her motion a copy of the petition that she had

filed in the legal-malpractice lawsuit and the motion to dismiss. In support of her res judicata argument,

Risinger asserted that Giddens’s breach-of-contract claim “arose from the same

transaction” and “operative facts” giving rise to Risinger’s legal-malpractice

claim, Giddens’s claim was a compulsory counterclaim, and the claims should

have been tried concurrently.

In

his response, Giddens asserted that Risinger breached the contract when she became

“unhappy with the renegotiated contract” and filed the legal-malpractice lawsuit. Giddens argued that res judicata did not bar

his breach-of-contract claim because “Albert Lee Giddens, a Professional Legal

Corporation” was not a party in Risinger’s legal-malpractice lawsuit.

The trial court granted Risinger’s

summary-judgment motion.

Standard of Review

To prevail on a summary-judgment

motion, a movant has the burden of proving that he is entitled to judgment as a

matter of law and there is no genuine issue of material fact. Tex. R.

Civ. P. 166a(c); Cathey v. Booth ,

900 S.W.2d 339, 341 (Tex. 1995). When a defendant moves for summary judgment, he

must either (1) disprove at least one essential element of the plaintiff’s

cause of action or (2) plead and conclusively establish each essential element

of his affirmative defense, thereby defeating the plaintiff’s cause of action. Cathey ,

900 S.W.2d at 341 . When deciding whether

there is a disputed, material fact issue precluding summary judgment, evidence

favorable to the non-movant will be taken as true. Nixon v.

Mr. Prop. Mgmt. Co. , 690 S.W.2d 546 , 548–49 (Tex. 1985). Every reasonable inference must be indulged in

favor of the non-movant and any doubts must be resolved in his favor. Id .

at 549.

Res Judicata

In

his second and third issues, Giddens argues that the trial court erred in

granting summary judgment on the ground of res judicata because “Albert Lee

Giddens, A Professional Legal Corporation” was not a party to the legal-malpractice

lawsuit brought by Risinger and she did not plead the affirmative defense of

res judicata in her answer.

Res judicata is an affirmative

defense that bars relitigation of claims that have been finally adjudicated or

that arise out of the same subject matter and that could have been litigated in

the prior action. Amstadt v. U.S. Brass Corp. , 919 S.W.2d 644, 652 (Tex. 1996); Tex. R. Civ. P. 94. Texas applies the transactional approach to

res judicata, “which requires claims arising out of the same subject matter to

be litigated in a single lawsuit.” Hallco Tex., Inc. v. McMullen County , 221

S.W.3d 50, 58 (Tex. 2006); see also Gracia v. RC Cola–7–Up Bottling Co. , 667

S.W.2d 517, 519 (Tex. 1984) (“The judgment in the first suit precludes a second

action by the parties and their privies on matters actually litigated and on

causes of action or defenses arising out of the same subject matter that might

have been litigated in the first suit.”). The doctrine of res judicata “serves vital

public interests” by promoting the finality of judgments and prevents needless,

repetitive litigation. Hallco Texas, Inc. , 221 S.W.3d at 58 .

The transactional approach mandates

that a defendant bring as a counterclaim any claim arising out of the

transaction or occurrence that is the subject matter of the opposing party’s

suit. State

and County Mut. Fire Ins. Co. v. Miller , 52 S.W.3d 693, 696 (Tex. 2001). A counterclaim

can be characterized as compulsory if: (1) it is within the jurisdiction of the

court; (2) it is not at the time of filing the answer the subject of a pending

action; (3) the claim is mature and owned by the defendant at the time of

filing the answer; (4) it arose out of the same transaction or occurrence that

is the subject matter of the opposing party’s claim; (5) it is against an

opposing party in the same capacity; and (6) it does not require the presence

of third parties over whom the court cannot acquire jurisdiction. Ingersoll-Rand

Co. v. Valero Energy Corp. , 997 S.W.2d 203, 207 (Tex. 1999); Tex. R. Civ. P. 97 (a). A claim having all of these elements must be

asserted in the initial action and cannot be asserted in later actions. Id .

A party relying on res judicata

must prove (1) a prior final determination on the merits by a court of

competent jurisdiction; (2) identity of parties or those in privity with them;

and (3) a second action based on the same claims as were or could have been

raised in the first action. Travelers Ins. Co. v. Joachim , 315

S.W.3d 860, 862 (Tex. 2010). Parties can

be in privity in at least three ways: (1) they can control an action even if

they are not parties to it; (2) their interests can be represented by a party

to the action; or (3) they can be successors in interest, deriving their claims

through a party to the prior action. Amstadt , 919 S.W.2d at 652 (citing Getty Oil Co. v. Insurance Co. of N. Am. ,

845 S.W.2d 794, 800 (Tex. 1992)).

Giddens

challenges the application of Risinger’s affirmative defense of res judicata only

by asserting that the there is no identity of parties between the defendant in Risinger’s

legal-malpractice lawsuit, which was against Giddens, individually, and the

plaintiff in the breach-of-contract lawsuit, i.e., “Albert Lee Giddens, A

Professional Legal Corporation.” Giddens

asserts that the compulsory counterclaim rule does not apply because he was not

“already in the lawsuit.”

Although the record is not entirely

clear on Giddens’s reasons for bringing this breach-of-contract lawsuit against

Risinger in the name of “Albert Lee Giddens, a Professional Legal Corporation,” [1] Giddens brought his suit within

five months from the date that he had agreed to the dismissal of Risinger’s legal-malpractice

lawsuit against him. The agreed motion

to dismiss the lawsuit identified Giddens as the defendant. We conclude that the summary-judgment record

establishes that there is an identity of parties in both Risinger’s legal-malpractice

lawsuit and Giddens’s breach-of-contract lawsuit. See

Amstadt , 919 S.W.2d at 652 (“Privity

exists if the parties share an identity of interests in the basic legal right

that is the subject of litigation.”). The

original attorney contract was made between Risinger and “Albert Lee Giddens,

Attorney at Law.” Risinger brought her

legal-malpractice lawsuit against Giddens, and the record demonstrates that

Giddens’s interests were represented in the prior action. Accordingly, we hold that the trial court did

not err in granting Risinger’s summary-judgment motion on the ground of res

judicata.

In regard to Giddens’s complaint

that Risinger did not plead her affirmative defenses in her answer, Giddens did

not make this objection in the trial court, and he has waived his complaint

regarding Risinger’s pleading defect. See Roark v. Stallworth Oil and Gas, Inc. ,

813 S.W.2d 492, 495 (Tex. 1991) (“If the non-movant does not object to a

variance between the motion for summary judgment and the movant’s pleadings, it

would advance no compelling interest of the parties or of our legal system to

reverse a summary judgment simply because of a pleading defect.”).

We overrule Giddens’s second and

third issues. Accordingly, we need not

reach Giddens’s first issue, in which he argues that there are fact issues on

the essential elements of his breach-of-contract claim.

Conclusion

We

affirm the judgment of the trial court.

Terry Jennings

Justice

Panel

consists of Justices Jennings, Sharp, and Brown.

[1]

“Albert Lee Giddens, a Professional Legal

Corporation” is, presumably, the name of the entity under which Giddens

currently practices law.

In his motion for rehearing, Giddens asserts that “Albert Lee Giddens, A

Professional Legal Corporation” was established on October 18, 1979. He has attached to his motion a certificate

of incorporation, which is not included in the appellate record, that states

that “Albert Lee Giddens, a Professional Legal Corporation” was incorporated in

1979. Based upon this certificate,

Giddens challenges our holding that there is an “identity of parties in both

Risinger’s legal-malpractice lawsuit and Giddens’s breach-of-contract

lawsuit.”

However,

the summary-judgment record demonstrates that Giddens represented Risinger in

the wrongful-death lawsuit. The original

attorney contract was made between Risinger and “Albert Lee Giddens, Attorney

at Law.” Giddens signed the petition as Risinger’s attorney, and his signature

block indicates that he represented Risinger while working as an attorney at

Smyrl & Giddens, LLP. Risinger

brought her legal-malpractice lawsuit against Albert Lee Giddens, Smyrl &

Giddens, LLP, and R. Michael Smyrl, who was apparently Giddens’s former law

partner at the law firm of Smyrl & Giddens, LLP.

Risinger

included in the summary-judgment record an affidavit in which she testified

that “Albert Lee Giddens” contacted her shortly after her husband was killed in

the automobile collision, she signed a contract with Giddens based upon his

representations that she had to retain an attorney for the matter, and Giddens

served as her attorney at a 2004 hearing in which the wrongful-death lawsuit was

settled. Risinger also testified that,

in 2006, she sued Giddens for legal malpractice arising from his representation

of her in the wrongful-death lawsuit, Giddens did not file any counterclaims,

she and Giddens agreed to settle this lawsuit, the parties’ settlement was

completed on February 22, 2010, and the legal-malpractice lawsuit was dismissed

with prejudice. It is undisputed that,

approximately five months later, “Albert Lee Giddens, A Professional Legal Corporation,”

brought the underlying lawsuit against Risinger. It is also undisputed that the

breach-of-contract claims brought by Giddens in the underlying lawsuit

necessarily arose from Giddens’s representation of Risinger in the

wrongful-death lawsuit and Risinger’s subsequent legal-malpractice lawsuit

against Giddens, which the parties settled and the trial court dismissed with

prejudice.

There

is no mention in the original attorney agreement, the documents from the

wrongful-death lawsuit, the documents from the legal-malpractice lawsuit, or

Risinger’s affidavit of a legal corporate entity identified as “Albert Lee

Giddens, A Professional Legal Corporation.”

There is also nothing in the record to contradict Risinger’s affidavit

testimony or the other documentary evidence demonstrating that Risinger

retained, and was represented by, Giddens in the wrongful-death lawsuit and

Risinger and Giddens settled Risinger’s legal-malpractice lawsuit against him

in late February 2010. There is also no

dispute that Giddens made no attempt to file against Risinger, in her

legal-malpractice lawsuit, the underlying breach-of-contract claims, which

Giddens subsequently attempted to assert in the instant lawsuit filed by

“Albert Lee Giddens, A Professional Legal Corporation,” just five months

later. Finally, the record before us

demonstrates that, whatever the factual basis of his breach-of-contract claims,

Giddens could have asserted any such claims in Risinger’s legal-malpractice

lawsuit.

Giddens

offers no explanation as to why Risinger is not entitled to the application of

the doctrine of res judicata. He has

simply asserted his breach-of-contract claims in the name of a legal corporate

entity that was not identified in his original attorney agreement with

Risinger, and this agreement necessarily forms the basis of any

breach-of-contract claim against Risigner.

Giddens also provides no explanation as to why he would be entitled to

bring his claim in the name of a legal corporate entity that was never

identified as a party to the dispute in any of the pleadings from the multiple

prior lawsuits. Thus, regardless of when

Giddens formed the entity “Albert Lee Giddens, A Professional Legal

Corporation,” the summary-judgment record firmly establishes that there is an

identity of parties in both Risinger’s legal-malpractice lawsuit and Giddens’s

breach-of-contract lawsuit and Giddens’s interests were represented in the

prior action.