Texas Appeals Court Dismisses Mushroom Distributor’s Malpractice Action

A Texas Court of Appeals has affirmed a lower court’s grant of the defendants’
summary judgment motion in a legal malpractice action brought
by a mushroom distributor, finding that he failed to prove lost profits as to
his negligence claim and filed his breach of fiduciary duty claim too late
under the applicable statute of limitations. Thomas v. Carnahan Thomas, LLP,
No. 05-11-01615-CV (Tex. Ct. App., 5th Dist., decided February 5, 2014). The
defendants represented mushroom distributor Stuart Thomas and provided
legal advice as to one of the ongoing disputes he had with the company that
produced the mushrooms he distributed. Among other matters, the attorneys
told Thomas he could violate non-compete agreements in his distribution and
employment contracts and also unsuccessfully represented him in handling
his declaratory judgment action as to the non-compete agreements.

The court agreed with the attorneys that Thomas had no evidence of lost
profits because his claims were based in part on gross revenues and periods
of net losses in his operations, and were further unsupported by evidence
such as tax returns or balance sheets. Thomas also failed to provide “reasonably
certain evidence” that he could have operated in other markets and what
his profits would have been had he done so. As to the breach of fiduciary
duty claim first asserted in the third amended petition, the court refused to
find that it related back to the originally filed complaint because Thomas
(i) made it clear that the claim was unrelated to the malpractice allegations
in the original complaint, (ii) failed to raise “a genuine issue of material fact
regarding whether the statute of limitations was deferred by the continuing
tort doctrine,” and (iii) “failed to raise a fact issue that the Attorneys concealed
his cause of action.”

Issue 512