In a 5-4 split decision issued June 26, the Texas Supreme Court broadly defined when an attorney defendant may use the qualified attorney immunity doctrine.
The case stems from a contentious divorce proceeding between Philip Byrd and Nancy Simenstad. The divorce decree awarded Simenstad, who was represented by the Fort Worth law firm Cantey Hanger, three aircrafts as her separate property, including a Piper Seminole that had been owned by Lucy Leasing Co., LLC, a company the decree awarded to Byrd. Although the decree made Seminstad responsible for all taxes on the aircraft, the bill of sale drafted by Cantey Hanger ultimately made Lucy Leasing responsible for the sales tax.
Byrd later sued Simenstad and Cantey Hanger for fraud, aiding and abetting, and conspiracy, alleging that they falsified the bill of sale to shift tax liability for the aircraft to Byrd in contravention of the divorce decree. Cantey Hanger moved for summary judgment on attorney-immunity grounds, arguing that it owed no duty to Byrd and could not be liable to Byrd for actions taken in the course and scope of its representation of Simenstad in the divorce proceeding. The plaintiffs argued that the attorneys’ fraud excepts them from immunity.
The trial court granted summary judgment to the law firm based on attorney qualified immunity. The Second Court of Appeals in Fort Worth reversed the trial court’s finding, and Cantey Hanger appealed to the Texas Supreme Court.
The majority opinion, drafted by Justice Debra Lehrmann, who was joined by Justices Eva Guzman, Jeffrey Boyd, John Phillip Devine, and Jeff Brown, held that a general fraud exception would significantly undercut the attorney immunity defense. Instead, the immunity defense does not extend to fraudulent conduct that is outside the scope of an attorney’s legal representation of his client. Because Cantey Hanger conclusively established that its alleged conduct—drafting the bill of sale—fell within the scope of its legal representation of Simenstad in the divorce proceeding, the law firm was protected by attorney immunity. In other words, the majority held that an attorney cannot be held liable to a third party for alleged fraud that occurs within the scope its legal representation of a client.
The Cantey Hanger case, however, should not be read to give attorneys a license to engage in fraud. As the majority noted, other mechanisms are in place to discourage and remedy wrongful conduct, such as sanctions, contempt, and attorney disciplinary proceedings.
Cantey Hanger, LLP v. Byrd, — S.W.3d —, 2015 WL 3976267 (Tex. June 26, 2015).