What is the statute of limitations for a legal malpractice claim in Texas?

At the outset, we express agreement with the court of appeals' determination that the two-year statute of limitations governs the present case. Tex. Civ. Prac. & Rem. Code Ann. § 16.003 (Vernon 1986). A cause of action for legal malpractice is in the nature of a tort and is thus governed by the two-year limitations statute. First National Bank of Eagle Pass v. Levine, 721 S.W.2d 287 (Tex.1986).

§ 16.003. Two-Year Limitations Period

(a) Except as provided by Sections 16.010, 16.0031, and 16.0045, a person must bring suit for trespass for injury to the estate or to the property of another, conversion of personal property, taking or detaining the personal property of another, personal injury, forcible entry and detainer, and forcible detainer not later than two years after the day the cause of action accrues.

(b) A person must bring suit not later than two years after the day the cause of action accrues in an action for injury resulting in death. The cause of action accrues on the death of the injured person.

Our analysis of the two-year statute of limitations question begins with an examination of prior decisions of this court construing the statute's "accrual" language. The primary purpose of statutes of limitations is to compel the exercise of a right of action within a reasonable time so that the opposing party has a fair opportunity to defend while witnesses are available and the evidence is fresh in their minds. Robinson v. Weaver, 550 S.W.2d 18, 20 (Tex.1977). For a suit to be timely under the two-year statute, it must be brought within two years following the date the cause of action accrues. Tex. Civ. Prac. & Rem. Code Ann. § 16.003(a) (Vernon 1986). The phrase "accrues" embodies a substantive law concept, and the courts are called upon to determine when a cause of action accrues and thus when the statute of limitations commences. Developments in the Law--Statutes of Limitations, 63 Harv. L. Rev. 1177, 1200 (1950). This court has previously twice relied upon the following language from Fernandi v. Strully, 35 N.J. 434, 173 A.2d 277, 285 (1961):

[T]he question when a cause of action accrues is a judicial one, and to determine it in any particular case is to establish a general rule of law for a class of cases, which rule must be founded on reason and justice....

In the absence of legislative definition and specification, the ... courts have often been called upon to delineate the statute; they have consciously sought to apply it with due regard to the underlying statutory policy of repose, without, however, permitting unnecessary individual injustices.

Robinson, 550 S.W.2d at 20; Gaddis v. Smith, 417 S.W.2d 577, 580-81 (Tex.1967).

The discovery rule is the legal principle which, when applicable, provides that limitations run from the date the plaintiff discovers or should have discovered, in the exercise of reasonable care and diligence, the nature of the injury. Gaddis, 417 S.W.2d at 578. In deciding whether the discovery rule is applicable to a certain cause of action, this court's decisions in the area of medical malpractice are particularly instructive. The general rule regarding the accrual of a medical malpractice cause of action, for purposes of application of statutes of limitations, had been that the cause accrued when the facts came into existence that authorized a claimant to seek a judicial remedy, notwithstanding that the claimant might not discover the wrong until after the statute of limitations had run. Carrell v. Denton, 138 Tex. 145, 157 S.W.2d 878 (1942). ¹

In Gaddis, we adopted the discovery rule in the context of foreign objects medical malpractice cases. While acknowledging that the discovery rule might make it more difficult for the defendant to gather evidence, we noted the lack of susceptibility to fraudulent prosecution in this type of case as well as the "shocking results" of barring recovery to a deserving plaintiff unable to know of the wrongful act before expiration of the limitations period. Gaddis, 417 S.W.2d at 581.

Additionally, we extended application of the discovery rule to causes of action based on injury due to a negligent vasectomy operation. Hays v. Hall, 488 S.W.2d 412

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(Tex.1972). However, we declined to apply the discovery rule to cases involving medical misdiagnosis, observing that the policies underlying the statute of limitations outweighed our concern for claimants who unknowingly lose, due to limitations, causes of action based on medical misdiagnosis. Robinson v. Weaver, 550 S.W.2d 18 (Tex.1977).

This court has never reached the question of the applicability of the discovery rule in legal malpractice cases. See Smith v. Knight, 608 S.W.2d 165 (Tex.1980). However, courts of appeals have reached divergent results in determining when a cause of action for legal malpractice accrues and the statute of limitations commences. See, e.g., Smith v. Knight, 598 S.W.2d 720, 721 (Tex.Civ.App.--Fort Worth 1980), writ ref'd n.r.e. per curiam, 608 S.W.2d 165 (Tex.1980) (discovery rule applies; citing the fiduciary relationship between attorney and client); McClung v. Johnson, 620 S.W.2d 644 (Tex.Civ.App.--Dallas 1981, writ ref'd n.r.e.) (discovery rule does not apply, but when duty arising out of the attorney-client relationship to disclose facts material to representation is breached, then the statute of limitations is tolled for so long as the attorney-client relationship exists); Pack v. Taylor, 584 S.W.2d 484 (Tex.Civ.App.--Fort Worth 1979, writ ref'd n.r.e.) (discovery rule does not apply).

This court has adopted the discovery rule in cases other than legal malpractice in which it is difficult for the injured party to learn of the negligent act or omission. Kelley v. Rinkle, 532 S.W.2d 947, 949 (Tex.1976) (discovery rule applicable to false credit report); Gaddis, 417 S.W.2d at 580 (discovery rule applicable in medical malpractice cases); Quinn v. Press, 135 Tex. 60, 140 S.W.2d 438 (1940) (discovery rule applicable in cases of fraud).

The policy reasons relied upon by Texas courts in adopting the discovery rule in actions for fraud, credit libel, and medical malpractice are no less compelling in legal malpractice actions. An attorney is obligated to use the skill, prudence, and diligence commonly exercised by practitioners of his profession. The California Supreme Court has recognized that a "[c]orollary to this expertise is the inability of the layman to detect its misapplication; the client may not recognize the negligence of the professional when he sees it." Neel v. Magana, Olney, Levy, Cathcart & Gelfand, 6 Cal.3d 176, 188, 491 P.2d 421, 428, 98 Cal.Rptr. 837, 844 (1971). A Texas commentator states: "[i]t is unrealistic to expect a layman client to have sufficient legal acumen to perceive an injury at the time of the negligent act or omission of his attorney." Ward, Legal Malpractice in Texas, 19 S.Tex.L.J. 587, 613 (1978).

The special relationship between an attorney and client further justifies imposition of the discovery rule. A fiduciary relationship exists between attorney and client. McClung, 620 S.W.2d at 647. As a fiduciary, an attorney is obligated to render a full and fair disclosure of facts material to the client's representation. Id. The client must feel free to rely on his attorney's advice. Facts which might ordinarily require investigation likely may not excite suspicion where a fiduciary relationship is involved. Robinson v. Weaver, 550 S.W.2d 18, 23 (Tex.1977) (Pope, J., dissenting). Further, breach of the duty to disclose is tantamount to concealment. McClung, 620 S.W.2d at 647. Thus, the California Supreme Court writes: "[p]ostponement of accrual of the cause of action until the client discovers, or should discover, the material facts in issue vindicates the fiduciary duty of full disclosure; it prevents the fiduciary from obtaining immunity for an initial breach of duty by a subsequent breach of the obligation of disclosure." Neel, 6 Cal.3d at 189, 491 P.2d at 429, 98 Cal.Rptr. at 845. ²

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Were we to follow the general rule, the client could protect himself fully only by ascertaining malpractice at the moment of its incidence. To do so, he would have to hire a second attorney to observe the work of the first. This costly and impractical solution would but serve to undermine the confidential relationship between attorney and client. See id. at 188, 491 P.2d at 428, 98 Cal.Rptr. at 844. ³

Citing Robinson v. Weaver, 550 S.W.2d 18 (Tex.1977), Maverick would have us decline to apply the discovery rule to legal malpractice cases involving professional diagnosis, judgment, and discretion. This court's five to four decision in that case refused to extend the discovery rule to misdiagnosis in a medical malpractice case. The court's decision was predicated upon the perceived enhanced danger of fraudulent and stale claims that might arise under the discovery rule. We conclude that the logic relied upon by the majority in Robinson is untenable as it relates to this case. See Robinson, 550 S.W.2d at 22 (Pope, J., dissenting).

In sum, we believe that any burden placed upon an attorney by application of the discovery rule is less onerous than the injustice of denying relief to unknowing victims. See Note, Accrual of Statutes of Limitations, 68 Calif.L.Rev. 106, 119 (1980); Note, Limitation of Action, 46 Texas L.Rev. 119, 120-21 (1967). Accordingly, we hold that the statute of limitations for legal malpractice actions does not begin to run until the claimant discovers or should have discovered through the exercise of reasonable care and diligence the facts establishing the elements of his cause of action.

The statute of limitations for legal malpractice is two years after a cause of action accrues.²³ A legal injury is incurred, and a cause of action accrues, when faulty professional advice is taken.²⁴ But because the discovery rule applies to legal-malpractice claims,²⁵ accrual is deferred until the client discovers, or should discover, the wrongful act and injury.²⁶ By adopting the discovery rule for legal-malpractice claims, we have accepted that such claims are inherently undiscoverable because " ‘[i]t is unrealistic to expect a layman client to have sufficient legal acumen to perceive an injury at the time of the negligent act or omission of his attorney.’ "²⁷

A cause of action for legal malpractice is in the nature of a tort and, thus, is governed by the two-year limitations statute. TEX. CIV. PRAC. & REM.CODE ANN.

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§ 16.003(a) (Vernon Supp.2000); First Nat'l Bank v. Levine, 721 S.W.2d 287 (Tex. 1986). Limitations generally begins to run when the cause of action accrues: when facts have come into existence that authorize a claimant to seek a judicial remedy. Apex Towing Co. v. Tolin, 41 S.W.3d 118, 120 (Tex.2001). However, when an attorney commits malpractice in the prosecution or defense of a claim that results in litigation, the statute of limitations on a malpractice claim against that attorney is tolled until all appeals on the underlying claim are exhausted or the litigation is otherwise finally concluded. Id. at 119.

The rationale behind tolling the statute of limitations when an attorney commits malpractice while representing a client in litigation is that the client can be put in the difficult position of "adopting inherently inconsistent litigation postures in the underlying case and in the malpractice case." Hughes, 821 S.W.2d at 156; see Apex Towing, 41 S.W.3d at 121. This appeal arises out of Turley's representation of Parsons in two separate suits: one against DuPont in federal court and one against Conoco in state court. However, both the state and federal cases involved the same wrongful death claim related to the death of Parsons' wife. All appeals on this claim were not exhausted until July 18, 1996; thus, under Apex Towing, the statute of limitations on Parsons' malpractice claims was tolled until that date. See Apex Towing, 41 S.W.3d at 119. We sustain Parsons' argument that the accrual of his claims for legal malpractice was tolled until all appeals were exhausted in the underlying litigation.

Claims for legal malpractice are subject to a two-year statute of limitations. Tex. Civ. Prac. & Rem. Code § 16.003(a); Erikson, 590 S.W.3d at 563. Generally, "[a] cause of action for legal malpractice accrues when the client sustains a legal injury or, in cases governed by the discovery rule, when the client discovers or should have discovered the facts establishing the elements of a cause of action." Hughes, 821 S.W.2d at 156.

But in Hughes, we held that "when an attorney commits malpractice in the prosecution or defense of a claim that results in litigation, the statute of limitations on the malpractice claim against the attorney is tolled until all appeals on the underlying claim are exhausted." Id. at 157. Unlike the legal-injury rule and discovery rule, which affect when a claim accrues, Hughes tolling is an equitable doctrine that tolls the running of limitations from the date of accrual through the date all appeals are exhausted. See id. at 156-57.

Our focus in Hughes was the court's ruling on the "last action of right" taken by the malpractice plaintiff. See 821 S.W.2d at 158 n.6. This approach suggests that in multi-party cases such as this one, the focus should be on the court's ruling on the last action taken by the malpractice plaintiff rather than the last action taken by a co-party. Accordingly, for Hughes tolling to encompass the entire time that appellate proceedings initiated by a co-party are pending, the malpractice plaintiff must continue to participate in those proceedings. We adopt this rule for three reasons.

First, this rule provides a forward-looking bright line that makes it easy for parties and counsel to calculate the deadline for filing a malpractice suit. Likewise, the rule makes it easy for adverse parties and courts to determine whether such a suit is barred by limitations. See Apex Towing, 41 S.W.3d at 122. Although we acknowledge that Zive's proposed rule-applying Hughes to any party's appeal of the

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underlying litigation-is also a bright-line rule, it would broaden the Hughes tolling rule significantly. Hughes tolling only extends through the exhaustion of "all appeals on the underlying claim" allegedly affected by malpractice-that is, all appeals involving a cause of action by or against the malpractice plaintiff, not every appeal addressing any claim in the case.^[5] 821 S.W.2d at 157 (emphasis added). We previously declined to broaden the Hughes exception to limitations, see Murphy v. Campbell, 964 S.W.2d 265, 272 (Tex. 1997), and we decline to do so again today.

Second, this rule does not impose a significant burden on the malpractice plaintiff, who may continue to participate in any appellate proceedings simply by filing a short document joining or adopting his co-party's positions. Our procedural rules allow "[a]ny party" to "join in or adopt by reference all or any part of a brief, petition, response, motion, or other document filed in an appellate court by another party in the same case." Tex.R.App.P. 9.7. Similarly, a party to the underlying appellate proceedings can qualify for relief in the U.S. Supreme Court by filing a document. See Sup. Ct. R. 12.6.^[6]

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Third, the rule requiring the malpractice plaintiff's participation in an appeal to continue tolling is consistent with the principle that a reversal on appeal as to one party generally does not warrant a reversal as to nonappealing parties. See Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 446 (Tex. 1989). When the malpractice plaintiff fails to participate in an appeal of the underlying case, Hughes does not toll limitations during a co-party's appeal because the outcome generally will not change with respect to the nonappealing malpractice plaintiff.

For an appeal in Texas courts, we conclude it is most appropriate for Hughes tolling to end when the court in which the case is pending rules on the last action taken by the malpractice plaintiff. Applying this rule here, tolling ended when this Court denied Zive's petition for review, as that was the ruling on the last action taken by Zive.^[8] Not only is this rule consistent with Hughes, where we focused on the date on which the "last action of right" taken by the malpractice plaintiffs was "concluded" by a court ruling, 821 S.W.2d at 158 n.6, it also advances our efforts to maintain "predictability and consistency" in our limitations jurisprudence. See Erikson, 590 S.W.3d at 566 (quoting Apex Towing, 41 S.W.3d at 122).

We acknowledge that there are other potential terminal points for the litigation that could be selected, such as the date of the mandate's issuance or the expiration of the deadline to file a notice of appeal or to

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initiate appellate proceedings in a higher court.^[9] But these approaches would complicate the process of determining when Hughes tolling ends, thereby undermining our goal of ensuring predictability. See id. Tying the end of Hughes tolling to the expiration of time to file a notice of appeal or petition for review, for example, would require courts and litigants to pinpoint a date when an action did not occur by considering (among other things) the type of judgment appealed, the court to which that judgment was appealed, and whether an applicable rule extended the deadline. See, e.g., Tex.R.App.P. 26.1-26.3, 53.7.^[10] Using the date of the mandate's issuance might appear simpler by comparison, but it would similarly require courts and litigants to focus on a seemingly arbitrary point subject to fluctuation. See Tex. R. App. P. 18.2, 18.7.^[11]Such complicated analyses are inappropriate in the context of Hughes tolling. Just as the analysis of whether Hughes tolling applies to a co-party's appeal focuses on the malpractice plaintiff's participation in that

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appeal, the determination of when litigation is "finally concluded" hinges on the relevant court's resolution of the malpractice plaintiff's last action on the underlying claim. Thus, the date Hughes tolling ends is the date on which the court where the underlying claim is pending rules on the malpractice plaintiff's last action regarding that claim.

Conclusion

In Hughes, we held that the statute of limitations for a malpractice claim is "tolled until all appeals on the underlying claim are exhausted." 821 S.W.2d at 157. We conclude Hughes tolling applies only to all appeals in which the malpractice plaintiff participates. Here, Hughes tolling for Zive's legal-malpractice claim ended on April 1, 2016, so Zive's malpractice suit-filed over two years later-is barred by limitations. We agree with the court of appeals that Sandberg conclusively established that limitations bars Zive's malpractice claim, and we therefore affirm the court of appeals' judgment.

Professional negligence, or the failure to exercise ordinary care, includes

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giving a client bad legal advice or otherwise improperly representing the client. Newton v. Meade, 143 S.W.3d 571, 574 (Tex.App.-Dallas 2004, no pet.); Greathouse, 982 S.W.2d at 172. For example, a lawyer can commit professional negligence by giving an erroneous legal opinion or erroneous advice, by delaying or failing to handle a matter entrusted to the lawyer's care, or by not using a lawyer's ordinary care in preparing, managing, and prosecuting a case. See, e.g., Newton, 143 S.W.3d at 574; Kimleco Petroleum, Inc. v. Morrison & Shelton, 91 S.W.3d 921, 923-24 (Tex. App.-Fort Worth 2002, pet. denied). The statute of limitations on professional negligence claims against lawyers is two years. Parsons v. Turley, 109 S.W.3d 804, 807 (Tex.App.-Dallas 2003, pet. denied).

On the other hand, breach of fiduciary duty by a lawyer "involves the `integrity and fidelity' of an attorney and focuses on whether an attorney obtained an improper benefit from representing the client." Gibson v. Ellis, 126 S.W.3d 324, 330 (Tex.App.-Dallas 2004, no pet.) (citing Kimleco Petroleum, 91 S.W.3d at 923). "An attorney breaches his fiduciary duty when he benefits improperly from the attorney-client relationship by, among other things, subordinating his client's interest to his own, retaining the client's funds, engaging in self-dealing, improperly using client confidences, failing to disclose conflicts of interest, or making misrepresentations to achieve these ends." Id. (citing Goffney v. Rabson, 56 S.W.3d 186, 193 (Tex.App.-Houston [14th Dist.] 2001, pet. denied)). The statute of limitations on a claim for breach of fiduciary duty is four years. Willis v. Donnelly, 199 S.W.3d 262, 279 (Tex.2006).

Texas courts have allowed clients to assert fraud claims against lawyers when the specific allegations of fraud centered on the fees charged for the lawyers' services. See Sullivan v. Bickel & Brewer, 943 S.W.2d 477, 481 (Tex.App.-Dallas 1995, writ denied) (citing T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 222 (Tex.1992)). The statute of limitations on fraud claims is four years. Id.; TEX. CIV. PRAC. & REM.CODE ANN. § 16.004 (Vernon 2005).

Texas courts do not allow plaintiffs to convert what are really negligence claims into claims for fraud, breach of contract, breach of fiduciary duty, or violation of the DTPA. See, e.g., Rangel v. Lapin, 177 S.W.3d 17, 24 (Tex.App.-Houston [14th Dist.] 2005, pet. denied) (concluding claims for DTPA violations and breach of contract actually claim for legal malpractice because crux of claims was lawyers did not provide adequate legal representation); Aiken v. Hancock, 115 S.W.3d 26, 29 (Tex.App.-San Antonio 2003, pet. denied) (allegations that lawyer falsely represented he was prepared to try case, failed to reveal he was not prepared to try case, falsely represented expert witness was prepared to testify, and failed to reveal expert witness not fully prepared to testify did not allege "self-dealing, deception, or express misrepresentations in [the lawyer's] legal representation," to support separate cause of action for breach of fiduciary duty); Kimleco Petroleum, 91 S.W.3d at 924 (crux of claim that lawyer negligently failed to timely designate qualified expert witness and misled clients into believing case ready for trial stated claim for legal malpractice, not breach of fiduciary duty); Ersek v. Davis & Davis, P.C., 69 S.W.3d 268, 270, 274 (Tex.App.-Austin 2002, pet. denied) (DTPA claim based on law firm's alleged "misrepresentations regarding its competency" was impermissibly fractured claim for legal malpractice); Goffney, 56 S.W.3d at 193-94 (client's allegations of breach of fiduciary duty against lawyers were "no more than a claim for

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legal malpractice" because allegations did not "amount to self-dealing, deception, or misrepresentations"); Greathouse, 982 S.W.2d at 172-75 (misrepresentations alleged as claims for breach of fiduciary duty, fraud, breach of contract, and others, interpreted as claims for legal malpractice because complaint was that lawyer did not provide adequate legal representation); Klein v. Reynolds, Cunningham, Peterson & Cordell, 923 S.W.2d 45, 49 (Tex.App.-Houston [1st Dist.] 1995, no writ) (op. on mot. for reh'g) (principal allegation that lawyer filed defective appeal without obtaining extension alleged legal malpractice, not breach of contract, breach of fiduciary duty, or violations of DTPA).

This Court has differentiated between claims against a lawyer for professional negligence and breach of fiduciary duty. For example, in Murphy v. Mullin, Hoard & Brown, L.L.P., 168 S.W.3d 288 (Tex. App.-Dallas 2005, no pet.), the focus of the clients' allegations was negligent drafting or review of documents and failure to timely inform the clients of defects in the documents. Id. at 290 n. 1. Additionally, the clients did not complain that the lawyers received an improper benefit from the representation. Id. As a result, we concluded the clients' claim for breach of fiduciary duty was actually a claim for professional negligence. Id.; see also Gibson, 126 S.W.3d at 330 (concluding that, even if lawyer gave incorrect explanations for deductions from settlement in personal injury lawsuit, no conclusive evidence lawyer knew of falsity at time or that explanations made for purpose of subordinating client's interest); Sprowl v. Dooley, No. 05-06-00359-CV, 2007 WL 1330447, at *1 (Tex. App.-Dallas May 8, 2007, no pet.) (mem. op.) (client's allegations that attorney failed to investigate and prosecute claim, failed to answer and respond to discovery, failed to file stay, and failed to file motion for contempt are allegations of professional negligence, even though client couched allegations in terms of negligence, fraud, and DTPA); Beck v. Looper, Reed & McGraw, P.C., No. 05-05-00724-CV, 2006 WL 1452108, at *1 (Tex.App.-Dallas May 26, 2006, no pet.) (mem.op.) (complaint that lawyer failed to disclose he omitted performance criteria from employment agreement and that lawyer transferred shares of stock without criteria having been met alleged inadequate legal representation and did not allege claim for breach of fiduciary duty).

We differentiated between claims of professional negligence and breach of contract in Newton v. Meade. In that case, the client, Dallas Meade, received a traffic ticket. Newton, 143 S.W.3d at 572. Meade called Everett Newton's office and was told Newton could handle the matter and that Meade would be notified when a court date was set. Id. Meade sent Newton his citation and a check for the attorney's fee. Id. But Newton did not file an appearance in the traffic citation matter, and Meade received a letter from the city clerk informing him the city was processing a complaint for failure to appear and issuing a warrant for his arrest. Id. After several unsuccessful attempts to speak to Newton, Meade received a letter from Newton declining to represent Meade and returning the fee. Id. at 573. Meade sued Newton for violations of the DTPA, malpractice, and breach of contract. Id. A jury found in favor of Meade on the malpractice and breach-of-contract claims. On appeal, we determined that Meade's claim was really a professional negligence claim, not a claim for breach of contract, because Newton's conduct in failing to file an appearance raised the question whether he failed to exercise that degree of care, skill, or diligence that is a lawyer's professional duty. Id. at 575. As a result, we reversed the damages award on the breach-of-contract claim. Id.

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When the facts of a case support claims against a lawyer for something other than professional negligence, clients have been allowed to pursue those other claims. In Latham v. Castillo, 972 S.W.2d 66, 69-70 (Tex.1998), the clients alleged not only that the lawyer failed to timely file their claim, but also that the lawyer "affirmatively misrepresented to them that he had filed and was actively prosecuting the claim." The court concluded that to characterize this claim as one for legal malpractice would ignore the distinction between negligent and deceptive conduct. Id. at 69.

Additionally, in Sullivan v. Bickel & Brewer, the client alleged his lawyers "negligently represented him," charged excessive fees, billed him for work that was never performed, "provided legal services in a manner intended to fraudulently lengthen the duration and increase the scope of litigation to increase their billings . . . [and] deceived him regarding their representation and billing practices for that representation." Sullivan, 943 S.W.2d at 482-83. We concluded the client stated causes of action for negligent legal practice and fraud because the case involved both "the quality of [the lawyers]' professional services" and also, "as a separate issue, the integrity of their billing practices."⁵