The Supreme Court of Texas has issued an opinion in USA Lending Group, Inc. v. Winstead, P.C., 669 S.W.3d 195 (2023). In this case the client sued its former law firm for failing to request damages in a default judgment motion. USA Lending hired the law firm to sue its former employee for breach of fiduciary duty. The law firm obtained a default judgment but did not seek an award of damages against the former employee of USA Lending. USA Lending sued the law firm for malpractice alleging that the Law Firm breached the duty of care by failing to include a damages claim in the default motion. The law firm moved to dismiss. The trial court denied the motion to dismiss but the Appellate Court reversed that decision on the ground that USA could not prove causation or collectability. The Supreme Court of Texas, in turn, reversed that decision and reinstated the complaint.
USA Lending provided an affidavit from its CEO that it instructed the law firm to seek damages and an affidavit from an expert witness, a former judge, who opinion that the request for damages would have been granted. A second expert opinion that the judgment could have been collected. The Supreme Court held that the affidavits of USA Lending created a question of fact that could not be resolved on a motion to dismiss and held that the case would be remanded for trial. The court stated:
The motion to dismiss stage is not a battle of evidence; it is the clearing of an initial hurdle. The Act does not select for plaintiffs certain to succeed; it screens out plaintiffs certain to fail—those who cannot support their claims with clear and specific evidence. Because USA Lending adduced prima facie evidence to support its claim for legal malpractice, the court of appeals erred in ordering the case dismissed. Accordingly, we reverse the judgment of the court of appeals and remand the case to the trial court.
Comment: this is a rare decision reversing a grant of a motion to dismiss in a legal malpractice case. Here the plaintiff, USA Lending, submitted affidavits into the record to support its claims, including the affidavits of its CEO, a retired judge and an expert who opined that the judgment was collectible.
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