Zenith Star Insurance Co. v. Wilkerson (150 S.W.3d 525, 2004)

OPINION

BEA ANN SMITH, Justice.

This case requires us to consider to what lengths an attorney must go to zealously represent his client and avoid legal-malpractice liability. It involves a claim by Zenith Star Insurance Company (Zenith) that its lawyer, Glen Wilkerson, committed legal malpractice in a suit seeking workers’ compensation benefits by failing to advance two theories — that venue under the workers’ compensation scheme is jurisdictional and that a plaintiffs mis-identification of a defendant is an affirmative defense. In the original suit seeking benefits, Zenith initially prevailed on a plea to the jurisdiction in a Guadalupe County district court. The Fourth Court of Appeals upheld that decision, but Zenith lost on remand after the court of appeals reversed its decision sua sponte and a jury found in favor of the worker on the merits of the case. Zenith alleges that Wilkerson’s negligence proximately caused its damages in the form of losing at trial on remand. The district court granted summary judgment in favor of Wilkerson. We conclude as a matter of law that Wilkerson was not negligent in failing to assert the jurisdiction and misidentification theories and that such failure was not the proximate cause of Zenith’s injury. Therefore, we affirm the summary judgment granted by the district court.

BACKGROUND

While driving his employer’s vehicle, Leon Galpin suffered injuries that rendered him a quadriplegic. He brought a claim to recover lifetime benefits before the Texas Workers’ Compensation Commission (the Commission) under the labor code. See Tex. Lab.Code Ann. § 409.003 (West 1996). Zenith is the workers’ compensation insurance carrier for Galpin’s employer, and Wilkerson represented Zenith in the administrative proceedings before the Commission. After a contested-case hearing, the Commission appeals panel affirmed the conclusion of the hearing officer denying benefits to Galpin. In July 1997, Galpin timely filed a suit for judicial review in the district court of Bexar County against “Zenith Insurance Company.” See id. § 410.252(a) (West Supp.2004) (to seek judicial review of Commission ruling, party must file suit no later than fortieth day after date on which decision of appeals panel was filed with division of hearings). Zenith’s original answer, prepared by Wilkerson, acknowledged that “Zenith Star Insurance Company,” not “Zenith Insurance Company,” was the proper defendant, and that Galpin had sued the wrong defendant. Galpin eventually moved to substitute Zenith Star Insurance Company for Zenith Insurance Company as the proper party defendant pursuant to stipulation of the parties.

On Zenith’s behalf, Wilkerson filed a plea to the jurisdiction based on Galpin’s failure to “simultaneously” file a copy of his petition with the Commission, see id. § 410.253 (West Supp.2004), and a motion to transfer venue because Galpin had not filed suit in the county where he resided at the time of the injury, see id. § 410.252(b)(1) (West Supp.2004) (party bringing judicial-review suit must file petition with appropriate court in county where employee resided at time of injury or death). The Bexar County court granted the venue transfer to Guadalupe County pursuant to an agreed order but did not dispose of Zenith’s plea to the jurisdiction, noting that Zenith did not waive or abandon its plea by virtue of the transfer. The Guadalupe County district court granted Zenith’s motion to dismiss for lack of subject-matter jurisdiction in March 1998.

Galpin appealed the Guadalupe County court’s final judgment to the Fourth Court of Appeals in San Antonio. On January 27, 1999, that court affirmed the dismissal of Galpin’s suit for want of jurisdiction, holding that the requirements of section 410.253 of the labor code, requiring a copy of the petition to be simultaneously filed with the Commission, were mandatory and jurisdictional. See Galpin v. Zenith Ins. Co., 993 S.W.2d 146, 146-47 (Tex.App.-San Antonio 1999, no pet.). On February 4, 1999, the Texas Supreme Court issued an opinion in Albertson’s, Inc. v. Sinclair, 984 S.W.2d 958, 958-59 (Tex.1999), holding that failure to timely file a copy of the petition with the Commission does not deprive a trial court of jurisdiction to review the denial of benefits. In light of Albert-son’s, the Fourth Court of Appeals on its own motion withdrew its original opinion in Galpin and substituted a new opinion on February 26, 1999, remanding the cause to the trial court. See Galpin, 993 S.W.2d at 147. On remand, a jury found in favor of Galpin, and Zenith was ordered to pay him lifetime benefits.

About sixteen months later, Galpin filed suit in Bexar County alleging that Zenith was acting in bad faith by failing to pay the benefits ordered under the final judgment. The case was transferred to Travis County. Zenith responded by fifing a motion for summary judgment, seeking a declaration that the final judgment rendered by the district court in Guadalupe County was void because the court lacked jurisdiction on two grounds: failure to timely file suit in the proper county and failure to timely file suit against the proper defendant. The Travis County court denied Zenith’s motion. That suit is still pending.

Zenith then filed this legal-malpractice action against Wilkerson in Travis County, asserting that it would have prevailed in the underlying litigation but for Wilkerson’s failure to plead or otherwise raise the following defensive legal theories: the Guadalupe County district court lacked jurisdiction because (1) the suit was initially filed in the wrong county, and (2) the suit was initially brought against the wrong defendant. Wilkerson filed a motion for summary judgment, which the trial court granted. In one issue, Zenith appeals the summary judgment, asserting that the evidence created a fact issue on negligence and that, therefore, Wilkerson was not entitled to judgment as a matter of law.

DISCUSSION

Standard of review

Because the propriety of a summary judgment is a question of law, we review the trial court’s decision de novo. Natividad v. Alexsis, Inc., 875 S.W.2d 695, 699 (Tex.1994); Texas Dep’t of Ins. v. American Home Assurance Co., 998 S.W.2d 344, 347 (Tex.App.-Austin 1999, no pet.). The standards for reviewing a motion for summary judgment are well established: (1) the movant has the burden of showing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law; (2) in deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the nonmovant will be taken as true; and (3) every reasonable inference must be indulged in favor of the nonmovant and any doubts resolved in its favor. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-9 (Tex.1985).

Legal malpractice

A legal-malpractice action is based on negligence. Cosgrove v. Grimes, 774 S.W.2d 662, 664 (Tex.1989). A lawyer in Texas is held to the standard of care that would be exercised by a reasonably prudent attorney:

If an attorney makes a decision which a reasonably prudent attorney could make in the same or similar circumstance, it is not an act of negligence even if the result is undesirable. Attorneys cannot be held strictly liable for all of their clients’ unfulfilled expectations. An attorney who makes a reasonable decision in the handling of a case may not be held liable if the decision later proves to be imperfect. The standard is an objective exercise of professional judgment, not the subjective belief that his acts are in good faith.

Id. at 665. The attorney’s conduct must be evaluated by the fact-finder based on the information the attorney has at the time of the alleged act of negligence. Id. at 664. To recover on a negligence claim, the plaintiff must prove four elements: (1) that there is a duty owed to him by the defendant, (2) a breach of that duty, (3) that the breach proximately caused the plaintiff injury, and (4) that damages occurred. Id. at 665 (citing McKinley v. Stripling, 763 S.W.2d 407 (Tex.1989)). Zenith asserts that summary judgment was improper because Wilkerson failed to sustain his burden to show that there is no fact issue on the elements of breach and proximate cause in light of Zenith’s evidence in the form of a lawyer’s affidavit opining that Wilkerson’s errors constituted negligence and caused Zenith’s injury. We will address the elements of breach and proximate cause as they pertain to venue and misidentification separately.

A. Venue

Zenith asks this Court to remand this cause because the question of whether Wilkerson was negligent with respect to its first “defense” — that filing suit in the wrong venue deprived the trial court of subject-matter jurisdiction — is a fact question to be decided by a jury and cannot be decided as a matter of law. We turn to this defense first as it relates to the breach element of malpractice.

Because a lawyer is held to the standard of care that would be exercised by a reasonably prudent attorney, expert testimony of an attorney is usually necessary to establish the standard of skill and care ordinarily exercised by an attorney. Hall v. Rutherford, 911 S.W.2d 422, 424 (Tex.App.-San Antonio 1995, writ denied). To establish compliance with the standard, expert testimony is also usually required. Jatoi v. Decker, Jones, McMackin, Hall & Bates, 955 S.W.2d 430, 434 (Tex.App.-Fort Worth 1997, writ denied). Once the defendant in a legal malpractice suit has submitted expert testimony on the standard of care, the plaintiff is then required to controvert the expert testimony with other expert testimony. Id. (citing Anderson v. Snider, 808 S.W.2d 54, 55 (Tex.1991)). Zenith cites Wilkerson’s summary-judgment motion, which was not supported by expert testimony going to the venue defense. Wilkerson rejoins that expert testimony is required only when the issue of an attorney’s negligence is a question of fact, not when it is a question of law.

Wilkerson cites a legal-malpractice treatise requiring two issues to be resolved when an attorney is charged with an error regarding the failure to raise a defensive legal theory: first, whether the attorney erred; and second, whether such error was caused by the attorney’s negligence. Ronald E. Mallen & Jeffrey M. Smith, Legal Malpractice § 38.11 (5th ed.2000). The first issue is a question of law, while the second is one of fact. Id. Before the second question can be reached, a court must initially determine whether the attorney erred, which is a question of law for the court. Id.; see Campbell v. Doherty, 899 S.W.2d 395, 398 (Tex.App.-Houston [14th Dist.] 1995, writ denied) (upholding summary judgment for defendant in legal malpractice action after finding that jury instruction, to which attorney allegedly failed to object, was legally correct). Wilkerson could only have erred by failing to assert the “defenses” about which Zenith complains if such defenses were legally valid. Whether a defense is legally valid is a question of law. See Mallen & Smith § 33.11. As Wilkerson sums up, “if Wilkerson was correct on the law, he could not be negligent.” We agree.

Zenith insists that the law about whether venue is jurisdictional was settled when Galpin’s lawsuit was filed and that it compelled a reasonable attorney to advance the defense or be subject to malpractice liability. Zenith cites Federal Underwriters Exchange v. Pugh and several opinions from various court of appeals for this proposition. See 141 Tex. 539, 174 S.W.2d 598, 600 (1943); e.g., Castillo v. Allied Ins. Co., 537 S.W.2d 486, 487 (Tex.Civ.App.-Amarillo 1976, writ ref'd n.r.e.); Leadon v. Truck Ins. Exch., 253 S.W.2d 903, 904-05 (Tex. Civ.App.-Galveston 1952, no writ); Garrett v. Hartford Accident & Indem. Co., 107 S.W.2d 726, 728 (Tex.Civ.App.-Eastland 1937, no writ). While noting that the settled law prior to 1931 dictated that filing suit in the statutory venue was jurisdictional, see Mingus v. Wadley, 115 Tex. 551, 285 S.W. 1084, 1088 (1926), overruled by Dubai Petroleum Co. v. Kazi, 12 S.W.3d 71, 76 (Tex.2000), Pugh actually reversed that law in response to an amendment to the statute allowing a court to transfer a case filed in the wrong venue to the proper court. Pugh, 174 S.W.2d at 600. The intermediate-court cases Zenith cites are not on point, as they speak to a court’s lack of subject-matter jurisdiction when a party misses the statutory time limit by first filing suit in federal court, not when a party files in the wrong county. See Leadon, 253 S.W.2d at 904-05; Garrett, 107 S.W.2d at 728. Castillo, while somewhat on point, merely reinforces Pugh by noting that the venue statute specifically allows transfer of a case to the proper venue. Castillo, 537 S.W.2d at 487. Thus, if the law was “settled” on the topic of venue in workers’ compensation cases after Pugh, it cut against Zenith’s interpretation by holding that venue was not jurisdictional, and a suit filed in a non-mandatory county could be transferred to the county of mandatory venue.

Yet, continues Zenith, even if Pugh was the controlling law at the time of the underlying judicial proceedings, the legislature amended section 410.252 in 1989 to remove the language allowing transfer to the proper court. See Act of Dec. 12, 1989, 71st Leg., 2d C.S., ch. 1, § 16.01(11), 1989 Tex. Gen. Laws 1, 114, amended by Act of May 12,1993, 73d Leg., R.S., ch. 269, § 1, sec. 410.252, 1993 Tex. Gen. Laws 987, 1209. Thus, it implies, Mingus was reinstated as the controlling law, and proper venue once again became jurisdictional. See Mingus, 285 S.W. at 1088. We reject this argument. The legislature’s enactment of a new workers’ compensation statute that omitted language allowing for the transfer of a case filed in the wrong county does not mean that the legislature intended to overrule Pugh. Nothing in the new law’s language indicates the legislative intent to make filing in the mandatory venue jurisdictional. Moreover, courts must liberally construe workers’ compensation legislation in favor of the worker. See Lujan v. Houston Gen. Ins. Co., 756 S.W.2d 295, 297 (Tex.1988). We conclude that, contrary to Zenith’s assertion, the law at the time Galpin filed suit did not provide that venue was jurisdictional; if anything, the law was unsettled at the least, if not settled in the opposite vein.

Even if the effect of filing suit in the wrong county was unsettled, the question of whether venue was jurisdictional remains a question of law. Courts routinely decide unsettled questions of law, weighing arguments and authority on both sides of an issue and determining which is the legally correct outcome. To resolve this question of law, we review opinions issued during and after the pendency of these proceedings.

The supreme-court case Albertson’s v. Sinclair, on which the San Antonio court of appeals based its sua sponte reversal in Galpin’s appeal, spoke specifically to the question of whether a plaintiffs timely filing of a copy of its petition with the Commission is jurisdictional. However, the language and reasoning of the opinion indicate a broader application. While concluding that the Commission filing requirement is mandatory, the Court also stated that “just because a statutory requirement is mandatory does not mean that compliance with it is jurisdictional.” Albertson's, 984 S.W.2d at 961 (citing Hines v. Hash, 843 S.W.2d 464, 467 (Tex.1992)). “When the statute is silent about consequences of noncompliance, we look to the statute’s purpose in determining the proper consequences of noncompliance. [Citations omitted.] Further, we liberally construe workers’ compensation legislation to carry out its evident purpose of compensating injured workers and their dependents.” Id. Finally, the Court concluded that, even though the filing requirement is mandatory, “[njevertheless, the liberal construction we must give workers’ compensation laws precludes a jurisdictional interpretation.” Id. The liberal construction we too must give workers’ compensation laws compels the similar conclusion that, while venue in a particular county is mandatory, it is not jurisdictional.

In a case directly on point, this Court has since held that section 410.252(b) of the labor code applies to the venue of an appeal to the district court, but not to the court’s jurisdiction to hear a particular type of case. Hartford Underwriters Ins. Co. v. Hafley, 96 S.W.3d 469, 473 (Tex.App.-Austin 2002, no pet.) (citing Dubai Petroleum Co. v. Kazi, 12 S.W.3d 71 (Tex. 2000)). Looking to the terms of the statute, we concluded in Hafley that “[t]he section heading describes it as a venue provision. By its language, the section does not limit or create specific powers in a specific district court, nor does it indicate that other district courts should be denied jurisdiction over worker’s compensation appeals.” Id.