Texas Supreme Court Issues Two Important Decisions on Attorney and Contractor Liability

Attorney Liability for Civil Wrongs Committed During Representation

In Carden v. Minton, Bassett, Flores & Carsey, P.C., the Supreme Court of Texas issued a new legal malpractice opinion on an issue about attorney liability for civil wrongs allegedly committed during the representation of a criminal defendant. The Texas Supreme Court significantly limited the Peeler doctrine’s reach in criminal defense malpractice cases. While Peeler continues to bar claims tied to trial strategy and conviction-related injuries, the Court ruled that billing disputes, excessive fees, failure to account for retainer expenditures, and failure to return unearned fees are now independently actionable.

Case Background

The case began when William McGee was convicted and sentenced in May 2016 to 42 years in prison. In 2022, he and his mother (who paid for his defense) sued his criminal defense attorneys at Minton, Bassett, Flores, & Casey, P.C. for legal malpractice, breach of fiduciary duty, breach of contract, fraud, and gross negligence. The Firm moved for dismissal asserting that:

1. the mother lacked standing to sue under any theory;
2. the Peeler public-policy bar precluded all legal malpractice claims because McGhee had not been exonerated of his crimes;
3. the remaining claims were improperly fractured malpractice claims;
4. regardless of fracturing, Peeler’s causation standard barred all claims; and
5. all claims were untimely.

The trial court granted the Firm’s motion and dismissed the suit with prejudice. The court of appeals affirmed, but it did not reach the fracturing and limitations issues.

The Supreme Court of Texas affirmed in part and reversed in part, holding that because the mother was not a client, she lacked standing to pursue legal malpractice claims premised on an attorney-client relationship, but that she could sue for fraud and breach of contract based on allegations the Firm solicited funds for specific services that were not provided (i.e., a “pocketbook” injury).

As to McGee, the Court held that Peeler barred his legal malpractice claims, repackaged malpractice claims, and claims for injuries “flowing from the conviction,” but Peeler did not preclude billing or fee dispute claims against the Firm that were independent from McGee’s conviction. The Court remanded to the court of appeals to consider the Firm’s fracturing and limitations issues.

Significant Updates to Anti-Fracturing Arguments

The most significant part of the majority opinion is the part that concludes the Peeler doctrine does not preclude McGee’s claims for charging excessive fees, failing to account for retainer-fund expenditures, and failing to return or unearned feeds because “[s]uch claims concern compliance with contractual obligations and the truthfulness of factual statements about fee use—not legal strategy, competence, advocacy, or guilt.” Although the Supreme Court remanded to the court of appeals to decide the anti-fracturing arguments, such reasoning also suggests the anti-fracturing arguments might not apply to such claims.

Justice Young filed a concurrence highlighting his concerns about the lawsuit’s timeliness. Chief Justice Blacklock filed a partial dissent, asserting that McGee did not have billing or fee dispute claims that could survive Peeler because he did not personally pay for the Firms’ defense services.

Distinction Between Premises Liability and Negligent Activty

The Supreme Court in JMI Contractors, LLC v. Medellin addressed two frequently litigated issues in workplace safety cases—(1) the distinction between premises liability and negligent activity and (2) the scope of the necessary-use exception as applied to injured independent contractors (it does not apply).The Court reversed the jury verdict, reasoning that contractors hired for their specialized skills and expertise are uniquely positioned to assess and mitigate obvious hazards. Unlike ordinary property visitors, independent contractors are expected to evaluate premises defects and make their own safety judgments. The Court emphasized that imposing a duty on contractors to avoid dangers they were hired specifically to address would be inconsistent with the contractor relationship.

Case Background

The case began when Jose Manuel Medellin, who worked as an independent contractor, fell backward off the unprotected edge of an apartment roof and sustained significant injuries. Medellin sued the general contractor, JMI, alleging theories of both general negligence and premises liability. Medellin argued that the unprotected roof’s edge presented an unreasonably dangerous condition on the premises. The jury returned a verdict for Medellin based on both a negligent activity theory and premises theory. The trial court rendered judgment on the verdict, the court of appeals affirmed, but the Supreme Court reversed and rendered a take-nothing judgment for the defendant.

The Supreme Court focused on two issues. First, whether the plaintiff’s claims sounded in premises liability or negligent activity. Second, whether an independent contractor bringing a premises liability claim can avail himself of the necessary-use exception to get around the general rule that there is no duty to make safe open and obvious dangers.

Determination Requires a Case-by-Case Review

Conducting a “forensic review” of cases (going back to 1948), the Court held that when an injury results from a confluence of factors, some involving human activity and others involving the condition of the premises, “we decide which controls by analyzing the essence or gravamen of that particular claim against that particular defendant.” Medellin’s general negligence claim failed because the gravamen of his complaint against JMI—failing to adequately safeguard the roof’s edge—sounded in a theory of nonfeasance, not malfeasance. There was nothing tying JMI, the general contractor, to the specific injury-causing activity. Nor had Medellin established that JMI fully controlled his safety and thereby increased the danger. Determining whether an injury sounds in negligent activity or premises liability requires a case-by-case determination focusing on whether any negligent activity may be properly attributed to a specific defendant.

To determine whether the plaintiff had a possible negligent activity claim, separate and apart from premises liability, the Court also analyzed the “retained-control” framework for independent contractors set out in Lee Lewis, Dow Chemical, and Moritz. To avail himself of a separate negligent activity claim under Lee Lewis, the plaintiff was required to show the defendant-contractor “itself fully controlled [his] safety and in so doing created an increased danger.”

Although the majority opinion is not completely clear on this point, it appears that the majority recognizes the “narrow” circumstance when liability in negligent activity may attach—even if there was no contemporaneous act of malfeasance by the general contractor at the time of the accident—but only if the plaintiff establishes (1) “the defendant retained full control over the plaintiff’s activity” and (2) the defendant “increased the risk of injury by creating a danger.”

Properly framing the initial “control” question in negligent activity cases is critical. The Court initially noted that “the jury never found that JMI retained control over [the plaintiff’s] safety.” This was despite the trial court asking the jury whether JMI exercised or retained some control over the use of fall protection safety measures for the roofing work performed at the Oaks on Bandera on the day of the incident” to which the jury answered “yes.” Such a “general finding” of “some control” as to some employees was insufficient under Texas law, which requires a “particularized finding of control linking the defendant to the plaintiff.”

Injured Independent Contractors Cannot “Use” the Necessary-Use Exception

The Court also held that independent contractors cannot invoke the necessary-use exception to the general rule that there is no duty to make safe open and obvious dangers. Independent contractors are uniquely positioned to avoid obvious premises defects. The Court noted that the record indicated the independent contractor “had substantial experience” with roofing projects. Unlike typical invitees, they have specialized skills and are often hired for projects that require that expertise. Furthermore, independent contractors are expected to use that expertise, take account of any obvious premises defects, and make their own judgment calls about what work they perform, the safest way to conduct their work, and what equipment to use in doing the work.

Independent contractors are “frequently hired for the very purpose of fixing an unreasonably dangerous condition. It would be incongruous to permit independent contractors to assert they were unable to mitigate risk from the danger when they agreed to take the job.” The Court also reasoned that “independent contractors generally do not implicate the policy considerations that led us to recognize the necessary-use exception in Parker,” where an ordinary citizen with no special knowledge or skills was unable to safely navigate an apartment’s defective exit—the only means of leaving those premises.

Key Takeaways from the Cases

1. Criminal defense attorneys should maintain rigorous billing records and ensure transparency in fee arrangements and retainer use.
2. Property owners and general contractors have stronger defenses against premises liability claims brought by independent contractors.