Latham v. Castillo
972 S.W.2d 66, 1998 WL 327702 (1998)
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Rule of Law:
An attorney’s affirmative misrepresentation to a client that a lawsuit has been filed, when it has not, can constitute an unconscionable action under the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA). A client suing for such conduct does not need to prove they would have won the underlying lawsuit and may recover for mental anguish without proving a separate economic injury.
Facts:
- Audona Castillo gave birth to twin daughters, Kay and Sara, who had birth defects.
- Sara died shortly after birth, and a separate medical malpractice suit regarding her death was settled.
- The surviving twin, Kay Castillo, died on February 14, 1988.
- In December 1989, the Castillos hired attorney B. Mills Latham to file a medical malpractice claim against Driscoll Hospital for Kay's death.
- The two-year statute of limitations for the claim against the hospital was set to expire on February 14, 1990.
- Latham affirmatively and repeatedly represented to the Castillos that he had filed the lawsuit and was actively prosecuting it.
- In reality, Latham never filed the lawsuit.
- The statute of limitations expired, permanently barring the Castillos' medical malpractice claim for Kay's death.
Procedural Posture:
- The Castillos sued their attorney, B. Mills Latham, in a Texas trial court for legal malpractice, unconscionable action under the DTPA, fraudulent misrepresentation, and breach of contract.
- After the Castillos presented their case, the trial court granted a directed verdict in favor of Latham on all claims.
- The Castillos, as appellants, appealed to the court of appeals.
- The court of appeals reversed the trial court's judgment on the DTPA, fraudulent misrepresentation, and breach of contract claims and remanded them for a new trial, while affirming the directed verdict on the negligence claim.
- Latham, as appellant, appealed the court of appeals' decision to the Supreme Court of Texas.
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Issue:
Does an attorney's affirmative misrepresentation to a client that a lawsuit has been filed, which causes the client to lose their right to sue, constitute an unconscionable action under the Deceptive Trade Practices-Consumer Protection Act (DTPA) for which mental anguish damages can be recovered without proof of a separate economic injury?
Opinions:
Majority - Justice Spector
Yes. An attorney's affirmative misrepresentation that a lawsuit has been filed constitutes an unconscionable action under the DTPA, for which mental anguish damages may be recovered without separate proof of economic injury. The court's reasoning is that the DTPA is intended to be liberally construed to protect consumers from deceptive practices. A claim under the DTPA for unconscionable action is distinct from a legal malpractice claim for negligence; the former targets deceptive conduct, not just a failure of professional duty. Therefore, the 'suit within a suit' requirement of proving the merits of the underlying case, necessary for malpractice claims, does not apply to this DTPA action. The court found Latham took advantage of the trust the Castillos placed in him to a 'grossly unfair degree.' Furthermore, mental anguish qualifies as 'actual damages' under the version of the DTPA applicable here, and the Castillos' testimony of being physically ill, devastated, and heartbroken provided sufficient evidence to meet the standard for compensable mental anguish.
Dissenting-in-part-and-concurring-in-part - Justice Owen
No. The attorney's conduct was not unconscionable under the DTPA, and the Castillos failed to prove actual damages. The dissent argues that 'unconscionable' conduct must be 'glaringly noticeable, flagrant, complete and unmitigated,' which is a higher standard than mere deception. Lying about filing a meritless lawsuit, while unethical, does not rise to this level. Crucially, the Castillos suffered no actual damages because they presented no evidence that their underlying medical malpractice claim had any merit; thus, they lost nothing of value. The dissent also contends that the Castillos' mental anguish stemmed from the death of their daughters, not from Latham's misrepresentation. The testimony related to the misrepresentation showed only 'mere emotions' like anger and vexation, which are not compensable under the standard set in Parkway Co. v. Woodruff.
Analysis:
This decision significantly distinguishes a claim for unconscionable conduct under the DTPA from a traditional legal malpractice claim based on negligence. It relieves plaintiffs of the substantial burden of proving the 'suit-within-a-suit'—that they would have won the underlying case—when their attorney engaged in affirmative, deceptive acts. The case establishes that the harm is the deception itself and the loss of the opportunity to have one's day in court, regardless of the underlying claim's ultimate merit. This holding broadens the scope of attorney liability under consumer protection statutes and lowers the evidentiary bar for clients who have been actively misled.
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